Manning Corporation is considering a new project requiring a $80,000 investment in test equipment with no salvage value. The project would produce $67,500 of pretax income before depreciation at the end of each of the next six years. The companys income tax rate is 38%. 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		$	8,000				$	16,000
Year 2			16,000					25,600
Year 3			16,000					15,360
Year 4			16,000					9,216
Year 5			16,000					9,216
Year 6			8,000					4,608
Totals		$	80,000				$	80,000

* The modified accelerated cost recovery system (MACRS) for depreciation is discussed in Chapter 8.

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