Telstar Communications is going to purchase an asset for $660,000 that will produce $320,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12- 12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow $ $ $ Year 1 0 $ 0 0 S $ Year 2 0 $ 0 $ 0 $ Year 3 0 $ 0 $ $ Year 4 0 0 0
Telstar Communications is going to purchase an asset for $660,000 that will produce $320,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12- 12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow $ $ $ Year 1 0 $ 0 0 S $ Year 2 0 $ 0 $ 0 $ Year 3 0 $ 0 $ $ Year 4 0 0 0
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Table 12-12 Depreciation percentages (expressed in decimals)
Depreciation 3-Year
Year
MACRS
11
2
3
5
6
7
NEMEN MEHREMESELNE
9
आआआआआआ EEEEE
15
E
EVENEMEN
MEMENER
21
GALERIE 300 SATSARE SE
SE
SENSE
TEPP
GEHEIME
MEN
0.333
0.445
0.148
0.074
1.000
5-Year 7-Yar 10-Year 15-Year 20-Year
MACRS MACRS MACRS MACRS MACRS
0.200
0.320
0.192
0.115
0.115
0.058
1.000
0.143
0.245
0.175
0.125
0.089
0.089
0.089
0.045
1.000
0.100
0.180
0.144
0.115
0.092
0.074
0.066
0.066
0.065
0.065
0.033
1.000
0.050
0.095
0.086
0.077
0.069
0.062
0.059
0.059
0.059
0.059
0.059
0.059
0.059
0.059
0.059
0.030
1.000
0.038
0.072
0.067
0.062
0.057
0.053
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.017
1.000
Transcribed Image Text:Table 12-12 Depreciation percentages (expressed in decimals)
Depreciation 3-Year
Year
MACRS
11
2
3
5
6
7
NEMEN MEHREMESELNE
9
आआआआआआ EEEEE
15
E
EVENEMEN
MEMENER
21
GALERIE 300 SATSARE SE
SE
SENSE
TEPP
GEHEIME
MEN
0.333
0.445
0.148
0.074
1.000
5-Year 7-Yar 10-Year 15-Year 20-Year
MACRS MACRS MACRS MACRS MACRS
0.200
0.320
0.192
0.115
0.115
0.058
1.000
0.143
0.245
0.175
0.125
0.089
0.089
0.089
0.045
1.000
0.100
0.180
0.144
0.115
0.092
0.074
0.066
0.066
0.065
0.065
0.033
1.000
0.050
0.095
0.086
0.077
0.069
0.062
0.059
0.059
0.059
0.059
0.059
0.059
0.059
0.059
0.059
0.030
1.000
0.038
0.072
0.067
0.062
0.057
0.053
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.045
0.017
1.000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Similar questions
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education