Manning Corporation is considering a new project requiring a $110,000 investment in test equipment with no salvage value. The project would produce $69,500 of pretax income before depreciation at the end of each of the next six years. The companys income tax rate is 32%. In compiling its tax return and computing its income tax payments, the company can choose between the two alternative depreciation schedules shown in the table. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use MACRS) (Use appropriate factor(s) from the tables provided.)

	Straight-Line Depreciation					MACRS Depreciation*
Year 1		$	11,000				$	22,000
Year 2			22,000					35,200
Year 3			22,000					21,120
Year 4			22,000					12,672
Year 5			22,000					12,672
Year 6			11,000					6,336
Totals		$	110,000				$	110,000

REQUIRED:

1. Compute the net present value of the investment if straight-line depreciation is used. Use 8% as the discount rate.

Chart Values are Based on: Year Net Cash Inflow X PV Factor = Present Value 1 2 3 4 = 5 Il 6 = Net present value