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07 Suppose that Sudbury Mechanical Drifters is proposing to invest $118 million in a new...

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07 Suppose that Sudbury Mechanical Drifters is proposing to invest $118 million in a new factory. It can depreciate this Investment straight-line over 10 years. The tax rate is 40%, and the discount rate is 10% a. What is the present value of Sudbury's depreciation tax shields? (Enter your answers in millions rounded to 1 decimal place) 10 Year 2 Total Year 3 Year 9 Year 10 Year Year 1 Year 7 Year Year 4 Year Straight-line Schedule Straight-ine, 10-year Tax Shields at 40% To PV (Tax Shields) at 10% Inc D. Suppose that the government allows companies to use double declining balance depreciation with the option to switch at any point to straight line. Now what is the present value of the depreciation tax shields? (Enter your answers in millions rounded to 1 decimal place.) Years Year 4 Year Year Years Total Year 2 Year 10 Year Year Yout Double decline tihedule Start of Year Book Value Depreciation Tax Selde 40% TC PV (Tax Seks 10% c. What would be the present value of the tax shield if the government allowed Sudbury to write-off the factory immediately? (Enter your answer in millions rounded to 1 decimal place.) Percent value of depreciation tax shields

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