elstar Communications is going to purchase an asset for $480,000 that will produce $230,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule inTable 12-12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket.

Fill in the schedule below for the next four years.

Earnings before depreciation and taxes: year 1, year 2, year 3, year 4

Depreciation: year 1, year 2, year 3, year 4

Earnings before taxes: year 1, year 2, year 3, year 4

Taxes: year 1, year 2, year 3, year 4

Earnings after Taxes: year 1, year 2, year 3, year 4

Depreciation: year 1, year 2, year 3, year 4

Cash Flow: year 1, year 2, year 3, year 4