Alternative depreciation methods; NPV

Kansas Salt $Co.$ is considering an investment in computer$-$based production technology as part of a business reengineering process. The necessary equipment will cost $$12,600,000,$ have a life of eight years, and generate annual net before$-$tax cash flows of $$2,170,000$ from operations. Cost of installation and training is considered nominal. The equipment will have no salvage value at the end of its eight$-$year estimated life. The company's tax rate and cost of capital are, respectively, $30$ percent and $5$ percent.

a$.1.$ If Kansas Salt Co$.$ uses straight$-$line depreciation for tax purposes, calculate the net present value of the investment. Note: Round your final answer to the nearest whole dollar.

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$2.$ Should the company make this investment based on the results of part $(1)?$

b$.$ Assume that the tax law allows the company to take accelerated annual depreciation on this asset in the following manner.

Years $1-2,2396$ of cost

Years $3-8996$ of cost

What is the net present value of the equipment?

Note: Round your final answer to the nearest whole dollar.

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$2.$ Should the company make this investment based on the results of part $(1)?$

c$.$ Recompute $($a$)$ assuming the tax rate is increased to $40$ percent:

What is the net present value of the equipment?

Note: Round your final answer to the nearest whole dollar.

$2.$ Should the company make this investment based on the results of part $(1)?$

Should the company make this investment based on the results of part $(1)?$

b$.$ Assume that the tax law allows the company to take accelerated annual depreciation on this asset in the following manner.

$\backslash$table$[[$Years $1-2,23\%$ of cost$],[$Years $3-8,996$ of cost$]]$

What is the net present value of the equipment?

Note: Round your final answer to the nearest whole dollar.

$2.$ Should the company make this investment based on the results of part $(1)?$

c$.$ Recompute $($a$)$ assuming the tax rate is increased to $40$ percent.

What is the net present value of the equipment?

Note: Round your final answer to the nearest whole dollar.

$

$2.$ Should the company make this investment based on the results of part $(1)?$

d$.$ Recompute $($b$)$ assuming the tax rate is increased to $40$ pefcent.

What is the net present value of the equipment?

Note: Round your final answer to the nearest whole dollar.

$

$2.$ Should the company make this investment based on the results of part $(1)?$