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Wendy's boss wants to use straight-line depreciation for the new expansion project because he said it will give higher net income in earlier years and
Wendy's boss wants to use straight-line depreciation for the new expansion project because he said it will give higher net income in earlier years and give him a straight-line method.) The applicable MACRS depreciation rates are 33.33%,44.45%,14.81%, and 7.41%. The project cost of capital is 10%, and its 25\%. a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Do not round intermediate calculions Round your answers to the nearest dollar. b. Which depreciation method would produce the higher NPV, and how much higher would it be? Do not round intermediate calculations. Round your answer to the nearest cent. The NPV under will be higher by $ Check My Work (No more tries available)
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