Present value of the tax savings from the depreciation

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Ace Electronics is planning a $150,000 investment in speakers for its business. The speakers will have a 5-year life and a $15,000 salvage value. The company has a required return of 6% and a 30% tax rate. Assuming Ace used straight line depreciation, what is the present value of the tax savings from the depreciation on the speakers?

Reference no: EM13917945

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