Your company is considering a new project that will require $100,000 of new equipment at the start
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Question:
Your company is considering a new project that will require $100,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $25,000 using straight-line depreciation. The cost of capital is 11 percent, and the firm's tax rate is 34 percent. Estimate the present value of the tax benefits from depreciation.
A. $14,841.29
B. $16,997.13
C. $15,017.54
D. $13,607.52
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