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Unformatted text preview: Capitalizing: The depreciation charge is $9,000 / 3 = $3,000 per year for 3 years, which reduces the tax liability by $3,000 x 0.38 = $1,140 per year for 3 years. CALC: n = 3 r = 12% PV = ? PMT = $1140 FV = 0 PV = $2,738.09 Difference = $3,420  $2,738.09 = $681.91 Note: the textbook solution used 1.12 but the r should be 12%....
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This note was uploaded on 09/18/2011 for the course FIN 303 taught by Professor Bernile during the Spring '11 term at University of Miami.
 Spring '11
 Bernile

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