The cost of capital is 11 and the firms tax rate is 39


Your Company is considering a new project that will require $700,000 of new equipment at the start of the project. The equipment will have a depreciable life of 5 years and will be depreciated to a book value of $200,000 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 39%. Estimate the present value of the tax benefits from depreciation.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: The cost of capital is 11 and the firms tax rate is 39
Reference No:- TGS02635309

Expected delivery within 24 Hours