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  3. 4. your company is considering a new project that

4. Your Company is considering a new project that will require $24,000 of new equipment at...

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Finance

4. Your Company is considering a new project that will require$24,000 of new equipment at the start of the project. The equipmentwill have a depreciable life of 7 years and will be depreciated toa book value of $1,600 using straight-line depreciation. The costof capital is 10%, and the firm's tax rate is 34%. Estimate thepresent value of the tax benefits from depreciation.

  • $1,088

  • $5,297

  • $2,112

  • $3,200

Answer & Explanation Solved by verified expert
4.3 Ratings (612 Votes)
Solution The present value of the tax benefits from depreciation 5297The solution is Option 2 5297Please find the attached screenshot of the excel sheetcontaining the    See Answer
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