Using accelerated depreciation but not using straight line

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Reference no: EM131882005

Calculate the NPV of a machine that costs 6000 today and has revenues of 5000/year and operating costs of 2000/year for 3 years. Assume straight-line depreciation, zero salvage value, a tax rate of 50% and a discount rate of 12%. Calculate its net present value again using the accelerated depreciation deductions of: 3000, 2000, and 1000. Why is the project viable using accelerated depreciation but not using straight line?

Reference no: EM131882005

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