Estimate the present value of tax benefits from depreciation

Reference no: EM13263361

Your company is considering a new project that will require $875,000 of new equipment on the start of a project. The equipment will have a depreciable life of 8 years and will be depreciated to a book value of $155,000 using a straight line depreciation. The cost of capital is 11% and the firm's tax rate is 30%. Estimate the present value of the tax benefits from depreciation?

Reference no: EM13263361

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