Question

Calculate the present value of depreciation tax savings on a depreciable asset with a purchase price of $5 million and zero salvage value, assuming a 10 % discount rate, a 34 % tax rate, and the following type of depreciation:
a. The asset is depreciated over a 3-year life according to Table 9.1.
b. The asset is depreciated over a 7-year life according to Table 9.1.
c. The asset is depreciated over a 20-year life according to Table 9.1.


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  • CreatedMarch 26, 2015
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