Question: #9. A capital expenditure project that will involve purchasing new equipment costing $20,000 with an additional $10,000 charge for delivery. Installation of the equipment is

#9. A capital expenditure project that will involve purchasing new equipment costing $20,000 with an additional $10,000 charge for delivery. Installation of the equipment is expected to be $8,000. The equipment has an expected life of 7yrs and an estimated salvage value of $10,000. The firm has a 25% marginal tax rate and has a12% weighted average cost of capital. Calculate the annual change in depreciation for this project, assuming simplified straight line depreciation.

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