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
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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
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