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Your Company is considering a new project that will require $22,000 of new equipment at the start of the project. The equipment will have a
Your Company is considering a new project that will require $22,000 of new equipment at the start of the project. The equipment will have a depreciable life of 8 years and will be depreciated to a book value of $2,000 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 40%. Estimate the present value of the tax benefits from depreciation.
$1,500
$1,000
$2,500
$5,146
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