A company purchases an asset that costs $10,000. This asset qualifies as 3-year property under MACRS. The company uses an after- tax discount rate of 12% and faces a 40% income tax rate. (Use Table 1, Table 2 and Exhibit 12.4.) 1. Demonstrate that the PV of the depreciation deductions, when the income tax rate is 40%, is $3,218. 2. Given an after-tax discount rate of 12%, what tax rate would be needed in order for the PV of the depreciation deductions to equal $4,000? Use the Goal Seek function of Excel. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Demonstrate that the PV of the depreciation deductions, when the income tax rate is 40%, is $3,218. (Do not round intermediate calculations. Round "Tax Savings" and "Present Values" to 2 decimal places.) Year MACRS % Depreciation Deduction Tax Savings PV Factor Present Values 1 33.33% $ 3,333 $ 1,333.20 0.893 $ 1,190.55 2 44.45% 4,445 1,778.00 0.797 1,417.07 3 14.81 % 1,481 592.40 0.712 421.79 4 7.41 % 741 296.40 0.636 188.51 100.00 % $ 10,000 $ 4,000.00 $ 3,217.91 Required 1 Required 2 >