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Please help me with parts A and B Suppose that Sudbury Mechanical Drifters is proposing to invest $10 million in a new factory. It can
Please help me with parts A and B
Suppose that Sudbury Mechanical Drifters is proposing to invest $10 million in a new factory. It can depreciate this investment straightline over 10 years. The tax rate is 40%, and the discount rate is 10%. a. What is the present value of Sudbury's depreciation tax shields? b. What would be the present value of the tax shield if the government allowed Sudbury to write-off the factory immediately? Complete this question by entering your answers in the tabs below. What is the present value of Sudbury's depreciation tax shields? Note: Enter your answers in millions rounded to 1 decimal place. What would be the present value of the tax shield if the government allowed Sudbury to write-off the factory immediately? Note: Enter your answer in millions rounded to 1 decimal placeStep by Step Solution
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