Question: Deskmoda Ltd is considering purchasing a new machine that costs 88'] 6'1 '14. The machine will be depreciated to 80 using straight line method over

Deskmoda Ltd is considering purchasing a new machine that costs 88'] 6'1 '14. The machine will be depreciated to 80 using straight line method over a 5-year life. It will generate net cash ow of 8128429 each year. An additional working capital of 854888 is required. This will be recovered at the end of the project life. The equipment will be sold for 881888 at the end of 5 years. The company tax rate is 30% and its cost of capital is 10%. Calculate the depreciation tax saving each year. a. 4918.28 b. 7705.74 x {3. 18966.84 d. 44255.96

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