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Kristin is evaluating a capital budgeting project that should last for 4 years. The project requires $800,000 of equipment. She is unsure what depreciation method

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Kristin is evaluating a capital budgeting project that should last for 4 years. The project requires $800,000 of equipment. She is unsure what depreciation method to use in her analysis, straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life ignore the half-year convention for the straight-line method). The applicable MACRS depreciation rates are 33%, 45%, 15% and 7%. The company's WACC is 9%, and its tax rate is 35 . What would the depreciation expense be each year under each method? Round your answers to the nearest cent. Year Scenario i Scenario 2 (Straight-Une) (MACRS) $ 2 $ 1 $ b. Which depreciation method would produce the higher NPV? Select How much higher would the NPV be under the preferred method? Round your answer to the nearest cent. $

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