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Question: 1. An asset with 5-year MACRS life will be purchased for $20,000. It will produce net annaul bene…
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An asset with 5-year MACRS life will be purchased for $20,000.
It will produce net annaul benefits of $5,000 per year for 6 years,
after which time it will have a net salvage value of zero and will
be retired. The company’s marginal tax rate is 35%. Complete the
following after-tax cash flow table.

Enter your answer with 2 decimal places, as follow:
1000.00

EOY BTCF MACRS Depreciation Taxable Income Taxes ATCF
0 -20000.00 -20000.00
1 5000.00 1000.00 350.00 4650.00
2 5000.00 -1400.00 -490.00 5490.00
3 5000.00 3840.00
4 5000.00 2304.00
5 5000.00
6 5000.00

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