Check My Work Click here to read the eBook: Analysis of an Expansion Project Problem 11-5 Depreciation Methods Wendy's boss wants to use straight-line depreciation for the new expansion project because he said it will give higher net income in earlier years and give him a larger bonus. The project will last 4 years an requires $900,000 of equipment. The company could use either straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated even over its 4-year life (ignore the half-year convention for the straight-line method). The applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%. The company's WACC is 9%, and its ta rate is 50%. a. What would the depreciation expense be each year under each method? Scenario 1 Scenario 2 Year (Straight Line) (MACRS) 1 $ 225,00 $ 299,97 2 $ 225,00 $ 400,05 3 $ 225,00 $ 133,29 4 $ 225,00 $ 66,690 b. Which depreciation method would produce the higher NPV? Scenario 2 How much higher would it be? Round your answer to the nearest dollar. $ 14,734 X