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What is the annual depreciation amount for Project A

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Reference no: EM133002636

Question - Project A requires an initial outlay of $10000 and will last for 5 years. The investment will be depreciated using straight-line depreciation to a book value of 0 over the life of the project. The corporate tax rate is 30% and the required rate of return is 8%.

a) What is the annual depreciation amount for Project A?

b) What is the annual depreciation tax shield for Project A?

c) What is the total depreciation tax shield over the life of Project A?

d) What is the present value of Project A's depreciation tax shields?

Reference no: EM133002636

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