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Present value of the tax benefits from depreciation

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Your Company is considering a new project that will require $10,000 of new equipment at the start of the project. The equipment will have a depreciable life of 5 years and will be depreciated to a book value of $3,000 using straight-line depreciation. The cost of capital is 9%, and the firm's tax rate is 34%. Estimate the present value of the tax benefits from depreciation.

Reference no: EM132554771

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