the company has just ordered a new equipment and paid $400,000. Of this sum, $30,000 is described by the supplier as an installation cost. Ms. Johnson needs to talk to the tax authority about whether the company can treat this $30,000 cost as tax-deductible current expense or as a capital investment. In the letter case, the company could depreciate the $300,000 straight-line over three years. How will the tax authority's decision affect the NPV of this project? Suppose the tax rate is 21% and opportunity cost of capital is 15%