Compute the net present value of the investment if straight line depreciation is used.Use 8% at discount rate.

Saved Manning Corporation is considering a new project requiring a $90,000 investment in test equipment with no salvage value. The project would produce $67,000 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 of $1. FV of $1. PVA of $1. and FVA of $1) Use MACRS) (Use appropriate factor(a) from the tables provided.) Straight-Line MACRS Depreciation Depreciation Year 1 $ 9,000 $18,000 Year 2 18,000 20,800 Year 3 18.000 17,280 Year 4 10.000 10,361 Year 5 18,000 10, 360 Year 6 9.000 5,184 Totala 690,000 690,000 * 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 8% as the discount rate Chart Values are Based on 8% Your Not can inflow X 1 2 PV Factor Present Value 4