Manning Corporation is considering a new project requiring a $110,000 investment in test equipment with no salvage value. The project would produce $74,000 of pretax income before depreciation at the end of each of the next six years. The companys income tax rate is 36%. 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. (FV of $1, PV of $1, FVA of $1 and PVA 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

equied 1. Complete the following table assuming use of straight-line depreciation. Net cash flow equals the amount of income before depreciation minus the income taxes. Income Before Straight-Line Taxable Income Net Cash Flows Depreciation Depreciation Income Taxes Year 1 Year 2 Year 3 Year 4 Year 5 Year 6