Crane Company is considering replacing an old asset with a new asset that costs $400,000 and is pated to have a salvage value of $30.000 at the end of 4 years. The new awet qualities as year property under the MACRS Tax wystem. Although the new asset will continue to generate the same operating revenues as the old et of $200,000 per year prank will yield the following preta savings in operating costs: $120,000 in each of the first three years and 590,000 in the fourth year. The old asset, which originally cost $300,000 and has accumulated depreciation of 250,000, can be sold now for $30,000. Crane is subject to a 40 tax rate for both ordinary income and capital gains, and has a 14 percent tax cost of capital. The MACRS percentages are as follows: The present value of the depreciation tax shield for the MACS depreciation of re's new assetis 5124 5311 Crane Company is considering replacing an old asset with a new asset that costs $400,000 and is pated to have a salvage value of $30.000 at the end of 4 years. The new awet qualities as year property under the MACRS Tax wystem. Although the new asset will continue to generate the same operating revenues as the old et of $200,000 per year prank will yield the following preta savings in operating costs: $120,000 in each of the first three years and 590,000 in the fourth year. The old asset, which originally cost $300,000 and has accumulated depreciation of 250,000, can be sold now for $30,000. Crane is subject to a 40 tax rate for both ordinary income and capital gains, and has a 14 percent tax cost of capital. The MACRS percentages are as follows: The present value of the depreciation tax shield for the MACS depreciation of re's new assetis 5124 5311