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Required information (The following information applies to the questions displayed below. Manning Corporation is considering a new project requiring a $80,000 Investment in test equipment with no salvage value. The project would produce $73,500 of pretax income before depreciation at the end of each of the next six years. The company's income tax rate is 30%. 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. $1. EV of $1. PVA of S1, and EVA of $1 Use MACRS) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Totals Straight-Line Depreciation $ 8,000 16,000 16,000 16,000 16,000 8,000 $80,000 MACRS Depreciation $16,000 25,600 15,360 9,216 9,216 4,608 $80,000 * The modified accelerated cost recovery system (MACRS) for depreciation is discussed in Chapter 8. 3. Compute the net present value of the investment if straight-line depreciation is used. Use 10% as the discount rate. 3. Compute the net present value of the investment if straight-line depreciation is used. Use 10% as the discount rate. * Answer is not complete. Chart Values are Based on: Year Net Cash Inflow Present Value PV Factor 0.9090 0.8264- 0.7513 0.6830 0.6209 0.5644 Present value of cash inflows Present value of cash outflows Net present value

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