Your Company is considering a new project that will require $11,000 of new equipment at the start of the project. The equipment will have a depreciable life of 6 years and will be depreciated to a book value of $2,000 using straight-line depreciation. The cost of capital is 8%, and the firm's tax rate is 21%. Estimate the present value of the tax benefits from depreciation.

Your Company is considering a new project that will require $11,000 of new equipment at the start of the project. The equipment will have a depreciable life of 6 years and will be depreciated to a book value of $2,000 using straight-line depreciation. The cost of capital is 8%, and the firm's tax rate is 21%. Estimate the present value of the tax benefits from depreciation. Multiple Choice $1,185 $1,500 o oo $315 vultiple choice 61.185 $1,500 85. . . $1456