Crane Manufacturing-management is considering overhauling their existing-line, which currently has both a book value and a salvage value of $0. It would.cost $280,000 to overhaul the existing line, but this expenditure would extend.its useful-life to five-years..The line would-have a $0-salvage value at the end of five years..The overhaul outlay would.be.capitalized and depreciated using MACRS over three years. The tax rate is 35 percent, the opportunity cost of.capital is 12percent..The NPV-of the new production line is $-360,000.(Do-not-round.discount-factor..Round.your.intermediate. calculations-and.final-answer-to.the nearest-dollar, e.g..5,275.)- EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period The MACRS schedule lists the tax depreciation rates that firms use for assets placed into service after the Tax Reform Act of 1986 went into effect. The table indicates the percentage of the cost of the asset that can be depreciated in each year during the period that it is being used. Year 1 is the year in which the asset is first placed into service 3-Year 33.33% 44.45 14.81 7.41 15-Year 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 20-Year 3.75% 7.22 6.68 6.18 5.71 5.29 4.89 4.52 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 2.24 100.00% ear 20.00% 32.00 19.20 1.52 11.52 5.76 ear 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.56 6.55 3.28 5.00% 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 10 12 13 14 15 16 17 19 21 Total 100.00%. 100.00% 100.00% 100.00% 100.00% NPV-of-renovating-old-line $?:It Crane-should a. Renovatel b..Replace1l the existing-line?1 Crane Manufacturing-management is considering overhauling their existing-line, which currently has both a book value and a salvage value of $0. It would.cost $280,000 to overhaul the existing line, but this expenditure would extend.its useful-life to five-years..The line would-have a $0-salvage value at the end of five years..The overhaul outlay would.be.capitalized and depreciated using MACRS over three years. The tax rate is 35 percent, the opportunity cost of.capital is 12percent..The NPV-of the new production line is $-360,000.(Do-not-round.discount-factor..Round.your.intermediate. calculations-and.final-answer-to.the nearest-dollar, e.g..5,275.)- EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period The MACRS schedule lists the tax depreciation rates that firms use for assets placed into service after the Tax Reform Act of 1986 went into effect. The table indicates the percentage of the cost of the asset that can be depreciated in each year during the period that it is being used. Year 1 is the year in which the asset is first placed into service 3-Year 33.33% 44.45 14.81 7.41 15-Year 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 20-Year 3.75% 7.22 6.68 6.18 5.71 5.29 4.89 4.52 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 2.24 100.00% ear 20.00% 32.00 19.20 1.52 11.52 5.76 ear 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.56 6.55 3.28 5.00% 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 10 12 13 14 15 16 17 19 21 Total 100.00%. 100.00% 100.00% 100.00% 100.00% NPV-of-renovating-old-line $?:It Crane-should a. Renovatel b..Replace1l the existing-line?1