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Please show work Suppose that Sudbury Mechanical Drifters is proposing to invest $10.5 million in a new factory. It can depreciate this investment straight-line over

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Suppose that Sudbury Mechanical Drifters is proposing to invest $10.5 million in a new factory. It can depreciate this investment straight-line 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? (Enter your answers in millions rounded to 1 decimal place.) Answer is complete and correct. Year Straight-line Schedule Straight-line, 10-year Tax Shields at 40% Tc PV (Tax Shields) at 10% Year Year Year Year Year Year Year Year Year 1 Total 2 3 4 5 6 7 8 9 10 $ 1.1 $ 1.1 $ 1.1$ 1.1 $ 1.1 $ 1.1$ 1.1 $ 1.1$ 1.1 $ 1.1 $ 10.5 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4$ 0.4$ 0.4$ 0.4$ 0.4$ 4.2 $ 0.4 $ 0.3 $ 0.3 $ 0.3 $ 0.3 $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 2.6 b. Suppose that the government allows companies to use double-declining-balance depreciation with the option to switch at any point to straight-line. Now what is the present value of the depreciation tax shields? (Enter your answers in millions rounded to 1 decimal place.) X Answer is not complete. Double decline Schedule Total Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 9 10 $ 10.5$ 8.4$ 6.7$ 5.4 $ 4.3 $ 3.4 $ 2.8 $ 2.2 X $ 1.8 X $ 1.4 X $ 2.1 $ 1.7 $ 1.3 1.3 $ 1.1 $ 0.9 $ $ 0.7 0.7 $ 0.6 X $ 0.4 X $ 0.4 X $ 0.3 X Start of Year Book Value Depreciation Tax Shields at 40% Tc PV (Tax Shields) at 10% c. What would be the present value of the tax shield if the government allowed Sudbury to write-off the factory immediately? (Enter your answer in millions rounded to 1 decimal place.) Percent value of depreciation tax shields

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