NW with Income Taxes: Straight-Line versus Accelerated Depreciation Carl William. Inc. is a conservatively managed boat company whose motto is. \"The old ways are the good ways.\" Management has always used straight-line depreciation for tax and external reporting purposes. Although they are reluctant to change. they are aware of the impact of taxes on a project's profitability. Required For a typical $200,000 investment in equipment with a ve-year life and no salvage value, determine the present value of the advantage resulting from the use of double-declining balance depreciation as opposed to straight-line depreciation. Assume an income tax rate of 21 '96 and a discount rate of 20%. Also assume that there will be a switch from double-declining balance to straight-line depreciation in the fourth year. None: Round your answers below to the nearest whole dollar. Present value of doubleideclining balance tax shield l S 0 1: Present value of straight-line tax shield l$ 0 x Advantage of double-declining balance depreciation l S 0 8