Check my work 10 Required information The following information applies to the q
ID: 2436760 • Letter: C
Question
Check my work 10 Required information The following information applies to the questions displayed below.] Part 2 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 DepreciationDepreciation $ 22,000 35,200 21,120 12,672 12,672 6,336 $110,000 Print Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Totals $ 11,000 22,000 22,000 22,000 22,000 11,000 $110,000 2. Complete the following table assuming use of MACRS depreciation. Net cash flow equals the income amount before depreciation minus the income taxes.Explanation / Answer
Year Income Before MACRS Taxable Income Net Cash Dep Depreciat Income Tax Flows Year1 68500 22000 46500 16740 51760 Year2 68500 35200 33300 11988 56512 Year3 68500 21120 47380 17056.8 51443.2 YEar4 68500 12672 55828 20098.08 48401.92 Year5 68500 12672 55828 20098.08 48401.92 Year6 68500 6336 62164 22379.04 46120.96