Where is the plant pw higher

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Question: Large Tech is choosing between countries A and B for a new manufacturing plant. To analyze tax policies, Large Tech will briefly assume matching costs of $120M for construction, $25M for annual operations, and $0 for salvage. The plant's life will be 20 years. The interest rate is 15%, and both countries have tax rates of 40%. Country A requires straight-line depreciation over 5 years. Country B permits SOYD but requires a 20-year depreciation period. Where is the plant's PW higher? By how much?

Reference no: EM132168044

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