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SLM Method: Scenario:1 Year Depreciation % Depreciation 25% $ 187,500.00 25% $ 187,500.00 25% $ 187,500.00 25% $ 187,500.00 Tax saving on depreciation $ 56,250.00 $ 56,250.00 $ 56,250.00 $ 56,250.00 [email protected] 14% 0.8772 0.7695 0.6750 0.5921 Present value $ 49,342.11 $ 43,282.55 $ 37,967.15 $ 33,304.52 PV of tax saving $ 163,896.32 MACRS Method: Scenario:2 Year Depreciation % Depreciation 33.00% $ 247,500.00 21 45.00% $ 337,500.00 15.00% $ 112,500.00 7.00% $ 52,500.00 AN Tax saving on depreciation $ 74,250.00 $ 101,250.00 $ 33,750.00 $ 15,750.00 [email protected] 14% 0.8772 0.7695 0.6750 0.5921 Present value $ 65,131.58 $ 77,908.59 $ 22,780.29 $ 9,325.26 PV of tax saving $ 175,145.72 MACRS will have higher NPV as it has higher PV of tax savings. Would be higher by $ 11,249.40 [ 175145.72-163896.32]
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