The cost of capital is 10 and the firms tax rate is 40


Your Company is considering a new project that will require $950,000 of new equipment at the start of the project. The equipment will have a depreciable life of 9 years and will be depreciated to a book value of $297,500 using straight-line depreciation. The cost of capital is 10%, and the firm's tax rate is 40%. Estimate the present value of the tax benefits from depreciation (closest to).

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Finance Basics: The cost of capital is 10 and the firms tax rate is 40
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