revenue
-expenses
BTCF (before tax cash flow)
-depreciation
Taxable Income
-Tax (%)
Net Income
+Depreciation
-First cost
After Tax cash Flow

Income Statement. Depreciation table Equipment with a first cost of $120,000 is depreciated by MACRS with a 5-year recovery period. The estimated expenses are $17, 500 each year; annual revenues are $90,000. Theeffective tax rate is 40%. (a) Construct a table showing yearly depreciation and book value to fullydepreciate the machine. (b) Construct a complete Income statement (using the format shown in class)showing only year 3