Your company is considering a new project that will require $1,000,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $150,000 using straight-line depreciation. The cost of capital is 13 percent, and the firm's tax rate is 34 percent. Estimate the present value of the tax benefits from depreciation.
I am required to do this problem in Excel, and I have no idea where to start. Please help!

To give a better idea of where you might be stuck, post back in with your thoughts on these...

• How much total depreciation will the company take on this asset?
• Using the straight-line method, how much depreciation will the company take each year over the asset's life?
• At the given tax rate, what will be the annual tax benefit of the annual depreciation expense?

That'll kick things off.