In year 1, Firm A paid $50,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,140 and $7,200 depreciation with respect to the asset. Firm As marginal tax rate in both years was 21 percent.

Required:

1. Compute Firm As net cash flow attributable to the asset purchase in each year.

Compute Firm As net cash flow attributable to the asset purchase in each year. (Cash outflows should be indicated by a minus sign. Round your intermediate calculations and final answers to nearest whole dollar amount.)

	Year 1	Year 2
Before-tax cash flows
Tax (cost) or savings
Net cash flow	$0	$0

2. Compute Firm As adjusted basis in the asset at the end of each year.

Compute Firm As adjusted basis in the asset at the end of each year.

	Amount
Adjusted basis at end of Year 1
Adjusted basis at end of Year 2