The present value of the tax benefits from depreciation

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Your Company is considering a new project that will require $1,050,000 of new equipment at the start of the project. The equipment will have a depreciable life of 7 years and will be depreciated to a book value of $472,500 using straight-line depreciation. The cost of capital is 10%, and the firm's tax rate is 34%. Estimate the present value of the tax benefits from depreciation (closest to).

$136,559

$54,450

$28,050

$82,500

Reference no: EM131336420

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