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Your firm is considering a project that would require purchasing $7.9 million worth of new equipment. Determine the present value of the depreciation tax shield associated with this equipment if the? firm's tax rate is 33%?, the appropriate cost of capital is 8 %?, and the equipment can be? depreciated:

Please round all answers to 4 decimals.

a. Straight-line over a ten-year period, with the first deduction starting in one year.

b. Straight-line over a five-year period, with the first deduction starting in one year.

c. Using MACRS depreciation with a five-year recovery period and starting immediately.

d. Fully as an immediate deduction.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92865451

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