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Problem 6 - 1 2 Taxes and project NPV Suppose that Sudbury Mechanical Drifters is proposing to invest $ 5 5 . 0 million in
Problem Taxes and project NPV Suppose that Sudbury Mechanical Drifters is proposing to invest $ million in a new factory. It can depreciate this investment straightline over years. The tax rate is and the discount rate is 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 writeoff the factory immediately?
Problem Taxes and project NPV
Suppose that Sudbury Mechanical Drifters is proposing to invest $ million in a new factory. It can depreciate this investment straightline over years. The tax rate is and the discount rate is
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 writeoff the factory immediately?
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