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Your company is considering a new project that will require $100,000 of new equipment at the start of the project. The equipment will have a
Your company is considering a new project that will require $100,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $5,000 using straight-line depreciation. The cost of capital is 14 percent, and the firm's tax rate is 21 percent. Estimate the present value of the tax benefits from depreciation. Multiple Choice $10,406 $14,031 $15,017 $39,147
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