Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $325,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Und straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straig ine method). The company's WACC is 9%, and its tax rate is 30%. a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nea dollar. Year Scenario 1 (Straight-Line) Scenario 2 (Bonus Depreciation) 0 $ 1 $ 2 3 4 $ $ b. Which depreciation method would produce the higher NPV? -Select- How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to the nearest do
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- Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $125,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 8%, and its tax rate is 30%. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar. Year Scenario 1(Straight-Line) Scenario 2(Bonus Depreciation) 0 $ $ 1 $ $ 2 $ $ 3 $ $ 4 $ $ Which depreciation method would produce the higher NPV? Straight-Line or Bonus DepreciationHow much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round…Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $300,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 12%, and its tax rate is 25%. a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar. Year 0 1 2 3 4 Scenario 1 (Straight-Line) $ $ $ $ $ Scenario 2 (Bonus Depreciation) unsS $ b. Which depreciation method would produce the higher NPV? -Select- How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to the nearest dollar. $Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $450,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 8%, and its tax rate is 30%. a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar. Year 0 1 2 3 4 ft Scenario 1 (Straight-Line) $ $ $ $ $ 0 112500 112500 112500 112500 Scenario 2 (Bonus Depreciation) $ 450000 $ $ 0 0 0 0 b. Which depreciation method would produce the higher NPV? Bonus Depreciation V How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your…
- Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $950,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 12%, and its tax rate is 30%. a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar.. Year Scenario 1 (Straight-Line) Scenario 2 (Bonus Depreciation). 0 $ $ 1 $ $ 2 $ $ 3 S $ 4 $ S b. Which depreciation method would produce the higher NPV? Select How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to the nearest dollar. $Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $525,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 12%, and its tax rate is 30%. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar.Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $725,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 11%, and its tax rate is 25%. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar. Year Scenario 1(Straight-Line) Scenario 2(Bonus Depreciation) 0 $ $ 1 $ $ 2 $ $ 3 $ $ 4 $ $ Which depreciation method would produce the higher NPV?How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to the nearest dollar.$
- Veronica is evaluating a capital budgeting project that should last for 4 years. The project requires $875,000 of equipment and is eligible for 100% bonus depreciation. She is unsure whether immediately expensing the equipment or using straight-line depreciation is better for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The company's WACC is 8%, and its tax rate is 30%. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollar. Year Scenario 1(Straight-Line) Scenario 2(Bonus Depreciation) 0 $ $ 1 $ $ 2 $ $ 3 $ $ 4 $ $ Which depreciation method would produce the higher NPV?How much higher would the NPV be under the preferred method? Do not round intermediate calculations. Round your answer to the nearest dollar.$Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $475,000 of equipment. She is unsure what depreciation method to use in her analysis, straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The applicable MACRS depreciation rates are 33%, 45%, 15%, and 7%. The company's WACC is 11 %, and its tax rate is 30%. What would the depreciation expense be each year under each method? Round your answers to the nearest cent. Year Scenario 1 (Straight - Line) Scenario 2 (MACRS) 1 $ $ 234 Which depreciation method would produce the higher NPV? -Select- How much higher would the NPV be under the preferred method? Round your answer to two decimal places. Do not round your intermediate calculations. $Charlene is evaluating a capital budgeting project that shouldlast for 4 years. The project requires $800,000 of equipment. She is unsure what depreciationmethod to use in her analysis, straight-line or the 3-year MACRS accelerated method.Under straight-line depreciation, the cost of the equipment would be depreciated evenlyover its 4-year life (ignore the half-year convention for the straight-line method). The applicableMACRS depreciation rates are 33%, 45%, 15%, and 7%, as discussed in Appendix 12A.The company’s WACC is 8%, and its tax rate is 35%.a. What would the depreciation expense be each year under each method?b. Which depreciation method would produce the higher NPV, and how much higherwould it be?
- Kristin is evaluating a capital budgeting project that should last for 4 years. The project requires $850,000 of equipment. She is unsure what depreciation method to use in her analysis, straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The applicable MACRS depreciation rates are 33%, 45%, 15%, and 7%. The company's WACC is 9%, and its tax rate is 35%. What would the depreciation expense be each year under each method? Round your answers to the nearest cent. Year Scenario 1(Straight-Line) Scenario 2(MACRS) 1 $ $ 2 $ $ 3 $ $ 4 $ $ Which depreciation method would produce the higher NPV? How much higher would the NPV be under the preferred method? Round your answer to the nearest centKristin is evaluating a capital budgeting project that should last 4 years. The project requires P800,000 of equipment. She is unsure what depreciation method to use in her analysis, straight-line or the 3-year MACRS (Modified Accelerated Cost Recovery System Method) method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life. The applicable MACRS depreciation rates per year are 33%, 45%, 15%, and 7% form year 1 to 4, respectively. The company’s WACC is 10%, and its tax rate is 40%. a. What would the depreciation expense be each year under each method? b. Which depreciation method would produce the higher NPV, and how much higher would it be?Wendy and Wayne are evaluating a project that requires an initial investment of $795,000 in fixed assets. The project will last for eight years, and the assets have no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 143,000 units per year. Price per unit is $36, variable cost per unit is $28, and fixed costs are $798,975 per year. The tax rate is 30 percent, and the required annual return on this project is 21 percent. The projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/- 14 percent. Required: (a)Calculate the best-case NPV. (Do not round your intermediate calculations.) (Click to select) # (b)Calculate the worst-case NPV. (Do not round your intermediate calculations.) (Click to select) +