Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires...

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Charlene is evaluating a capital budgeting project that shouldlast for 4 years. The project requires $675,000 of equipment. Sheis unsure what depreciation method to use in her analysis,straight-line or the 3-year MACRS accelerated method. Understraight-line depreciation, the cost of the equipment would bedepreciated evenly over its 4-year life (ignore the half-yearconvention for the straight-line method). The applicable MACRSdepreciation rates are 33%, 45%, 15%, and 7%. The company's WACC is12%, and its tax rate is 35%.
a What would the depreciation expense be each year under eachmethod? Round your answers to the nearest cent.
Year Scenario 1 (Straight-Line) Scenario 2 (MACRS) 1 $ $ 2 34
b Which depreciation method would produce the higher NPV?
c How much higher would the NPV be under the preferred method?Round your answer to two decimal places. Do not round yourintermediate calculations. $

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Charlene is evaluating a capital budgeting project that shouldlast for 4 years. The project requires $675,000 of equipment. Sheis unsure what depreciation method to use in her analysis,straight-line or the 3-year MACRS accelerated method. Understraight-line depreciation, the cost of the equipment would bedepreciated evenly over its 4-year life (ignore the half-yearconvention for the straight-line method). The applicable MACRSdepreciation rates are 33%, 45%, 15%, and 7%. The company's WACC is12%, and its tax rate is 35%.a What would the depreciation expense be each year under eachmethod? Round your answers to the nearest cent.Year Scenario 1 (Straight-Line) Scenario 2 (MACRS) 1 $ $ 2 34b Which depreciation method would produce the higher NPV?c How much higher would the NPV be under the preferred method?Round your answer to two decimal places. Do not round yourintermediate calculations. $