Your Company is considering a new project that will require $520,000 of new equipment at the start of the project. The equipment will have a depreciable life of 8 years and will be depreciated to a book value of $184,000 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 21%. Estimate the present value of the tax benefits from depreciation.
A. $8820
B. $42,000
C. $33,180
D. $45,389
Answer: D
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