Your Company Is Considering a New Project That Will Require

question 45

Multiple Choice

Your company is considering a new project that will require $100,000 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 $25,000 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 34%. Estimate the present value of the tax benefits from depreciation.

• A) $13,607.52
• B) $14,841.29
• C) $15,017.54
• D) $16,997.13

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