Problem 24-3A Computation of cash flows and net present values with alternative depreciation methods LO P3 [The following information applies to the questions displayed below.] Manning Corporation is considering a new project requiring a $80,000 investment in test equipment with no salvage value. The project would produce $68,500 of pretax income before depreciation at the end of each of the next six years. The companys income tax rate is 34%. 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. Problem 24-3A Part 4 4. Compute the net present value of the investment if MACRS depreciation is used. Use 6% as the discount rate.