The equipment has six years of economic life

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Reference no: EM132054217

Milson Services purchased an equipment with $1.8 million. The equipment has 6 years of economic life. How much are the annual depreciation costs (using straight - line method and using MACRS mehtod)? MACRS annual tax allowance percentage are: 20%,32%,19%,12%,11%,6%. If the tax rate is 40%, how much are annual tax savings using each method? What is present value of the tax saving under each approach?

(HINT: use 10% Interest Rate)

(For finding the Present Value Please explain how you found those values using a financial calculator)

Reference no: EM132054217

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