Value of the tax benefits from depreciation

Reference no: EM1344381

Your company is considering a new project that will require $1,055,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $195,000 using straight-line depreciation. The cost of capital is 14 percent, and the firm's tax rate is 40 percent.

Required:

Estimate the present value of the tax benefits from depreciation

Reference no: EM1344381

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