Check my work 9 Required information The following information applies to the qu

Question

Check my work 9 Required information The following information applies to the questions displayed below. Part 1 of 4 Manning Corporation is considering a new project requiring a $110,000 investment in test equipment with no salvage value. The project would produce $68,500 of pretax income before depreciation at the end of each of the next six years. The company's income tax rate is 36%. In compiling its tax return and computing its income tax payments, the company can choose between the two alternative depreciation schedules shown in the table. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use MACRS) (Use appropriate factor(s) from the tables provided.) 1.66 points eBook Straight-Line MACRS Depreciation Depreciation 22,000 35,200 21,120 12,672 12,672 6,336 $110,000 Print Year 1 Year 2 Year Year 4 Year 5 Year 6 Totals s 11,000 22,000 22,000 22,000 22,000 11,000 $110,000 References Required 1. Complete the following table assuming use of straight-line depreciation. Net cash flow equals the amount of income before depreciation minus the income taxes

Explanation / Answer

Year Income Before SLM Taxable Income Net Cash Dep Depreciation Income Tax Flows YEar1 68500 11000 57500 20700 47800 Year2 68500 22000 46500 16740 51760 Year3 68500 22000 46500 16740 51760 Year4 68500 22000 46500 16740 51760 Year5 68500 22000 46500 16740 51760 Year6 68500 11000 57500 20700 47800

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