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Purty Corp has an new investment project that will cost $1.5 mil to purchase. It plans to record depreciation of $300,000 each year for the

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Purty Corp has an new investment project that will cost $1.5 mil to purchase. It plans to record depreciation of $300,000 each year for the five year life of the project, which will provide tax shields based on the corporate income tax of 30%. Based on future cash flow projections, Purty has calculated that the project has an NPV of $220,000 Prior to investing in the project, the government outlaws recording depreciation as a tax deducible expense, which eliminates the depreciation tax shields. With this announcement, what will happen to the NPV of the project? NPV will increase NPV will not change NPV will decrease

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