MACRS depreciation expense and accounting cash flow Pavlovich Instruments, Inc, a maker of precision telescopes, expects to report pretax income of $439,000 this year The company's financial manager is considering the timing of a purchase of new computerized lens grinders. The grinders will have an installed cost of $83,000 and a cost recovery period of 5 years. They will be depreciated using the MACRS schedule Corporate tax rates are given i a. If the firm purchases the grinders before year-end, what depreciation expense will it be able to claim this year? b. If the firm reduces its reported income by the amount of the depreciation expense calculated in part a, what tax savings will result? a. The depreciation expense they will be able to claim this year is $ (Round to the nearest dollar) b. The tax savings will be $(Round to the nearest dollar) info Quiz: Chapter 4 Quiz Question More info - x the kon here in order to copy the contents of the data table below into a spreadsheet) rporate Tax Rate Schedule Range of taxable income Tax calculation (Marginal rate Amount over base bracke Base tax 50 $50,000 50,000 0 75,000 75,000 100.000 100,000 335,000 335,000 10,000,000 10,000,000 15.000.000 3.400.000 30 7,500 25% 13,750 C% 22.250 +09% 113.900 04% .00% (15% 501 x amount over 50,000) 75,000) x amount ver 100,000) x amount over 335,000) 10,000,000) 15000000 to 18.333333 5.150.000 0% Kamount over 15,000,000) Over 18.333333 6416667 0% 18.333333) Print Done on the icon here in order to copy the contents of the data table below into a spreadsheet) ounded Depreciation Percentages by Recovery Year Using MACRS for rst Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 10 years 33% 20% 14% 10% 45% 32% 25% 10% 15% 19% 10% 14% 1% 12% 17% 12% 12% 9% 9% 1% 9% 0% 5% 7% 1% 6% 0% 6% 10 11 Total 4% 100% 100% 100% 100% These percentages have been rounded to the nearest whole percent to simplify calculations while Print Done