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Your firm is considering a project that would require purchasing $ 7 . 5 million worth of new equipment. Determine the present value of the

Your firm is considering a project that would require purchasing $ 7.5 million worth of new equipment. Determine the present value of the depreciation tax shield associated with this equipment if the firm's tax rate is 20% using the alternative depreciation methods below. Note that because the depreciation tax shield is essentially a riskless cash flow(assuming the firm's tax rate remains constant), the appropriate cost of capital to evaluate the benefit from accelerated depreciation is the risk-free rate; assume this rate is 5% for all maturities.
a. Straight-line over a10-year period, with the first deduction starting in one year.
b. Straight-line over a five-year period, with the first deduction starting in one year.
c. Using MACRS depreciation with a five-year recovery period and starting immediately.
d.100% bonus depreciation(all the depreciation expense occurs when the asset is put into use, in this case immediately).
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