It is necessary to evaluate the profitability of proposed improvements to a process prior to obtaining approval to important changes. For one such process, the capital investment (end of year 0) for the project is $250,000. There is no salvage value. In years 1 and 2, you expect to generate an after-tax revenue of $60,000/y from the project. In years 3-8, you expect to generate an after-tax revenue of $50,000/y. Assume that the investments and cash flows are single transactions occurring at the end of the year. Assume an effective annual interest rate of 9%.

The net revenue figures were generated using a taxation rate of 45% and a straight-line depreciation over the eight-year project. Calculate the yearly net revenues if the five-year MACRS depreciation schedule were used.

Table 1. MACRS Depreciation Schedule

Year	Depreciation Allowance (% of Capital Investment)
1	20.00
2	32.00
3	19.20
4	11.52
5	11.52
6	5.76