Your Firm is considering a project that would require purchasing 7.2 million worth of new equipment....

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Your Firm is considering a project that would require purchasing7.2 million worth of new equipment. Determine the present value ofthe depreciation tax shield associated with this equipment if thefirm’s tax rate is 35%, the total appropriate cost of capital is10%, and the equipment can be depreciated.

A. Straight line over a ten year period, with the firstdeduction starting in one year. The present value of thedepreciatipn tax shield associated with the equipment is $____ million. (Round the final answer to three decimalplaces. Round all intermediate values to four decimal places asneeded).

B. Straight line over a five year period, with the firstdeduction starting in one year. The pesent value of thedepreciation tax shield associated with this equipment is$_ million. ( Round the final answer to three decimalplaces. Round all intermediate values to four decimal places asneeded)

C. Using MACRS depreciation with a five year recovery periodand starting immediately. The present value of the depreciation taxshield associated with this equipment is $_ million.(Round the final answer to three decimal places. Round allintermediate values to four decimal places as needed.)

D. Fully as an immediate deduction. The present value of thedepreciation tax shield is $______ million (Round the finalanswer to three decimal places. Round all intermediate values tofour decimal places as needed)

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Your Firm is considering a project that would require purchasing7.2 million worth of new equipment. Determine the present value ofthe depreciation tax shield associated with this equipment if thefirm’s tax rate is 35%, the total appropriate cost of capital is10%, and the equipment can be depreciated.A. Straight line over a ten year period, with the firstdeduction starting in one year. The present value of thedepreciatipn tax shield associated with the equipment is $__________ million. (Round the final answer to three decimalplaces. Round all intermediate values to four decimal places asneeded).B. Straight line over a five year period, with the firstdeduction starting in one year. The pesent value of thedepreciation tax shield associated with this equipment is$_____________ million. ( Round the final answer to three decimalplaces. Round all intermediate values to four decimal places asneeded)C. Using MACRS depreciation with a five year recovery periodand starting immediately. The present value of the depreciation taxshield associated with this equipment is $_____________ million.(Round the final answer to three decimal places. Round allintermediate values to four decimal places as needed.)D. Fully as an immediate deduction. The present value of thedepreciation tax shield is $____________ million (Round the finalanswer to three decimal places. Round all intermediate values tofour decimal places as needed)