Manning Corporation is considering a new project requiring a $90,000 investment in test equipment with no salvage value. The project would produce $71,000 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. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use MACRS) (Use appropriate factor(s) from the tables provided.)

The following Information applies to the questions displayed below. Manning Corporation is considering a new project requiring a $90,000 investment in test equipment with no salvage value. The project would produce $71,000 of pretax income before depreciation at the end of each of the next six years. The company's income tax rate is 38%. In com piling 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 MACRS Depreciation Depreciation Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $9,000 18,000 18,000 18,000 18,000 9,000 18,000 28,800 7,280 10,368 10,368 5,184 Totals $90,000 $90,000