Question: Your Company is considering a new project that will require $20,000 of new equipment at the start of the project. The equipment will have a

Your Company is considering a new project that will require $20,000 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 $1,400 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.

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