Table 12-12 Depreclation percentages (expressed In decimals) Depreciation 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year MACRS MACRS Year MACRS MACRS MACRS MACRS 0.200 0.143 0.100 0.038 1 0.333 0.050 ********* 0.445 0.245 0.180 0.072 2 0.320 0.095 0.144 0.086 0.148 0.192 0.175 0.067 0.074 0.115 0.125 0.115 0.077 0.062 4 0.069 0.057 5 0.089 0.115 0.092 0.053 0.058 0.089 0.074 0.062 0.059 7 0.089 0.066 0.045 0.045 0.066 0.059 0.045 0.045 0.065 0.059 10 0.065 0.059 0.045 0.033 0.059 0.045 11 12 0.059 0.045 0.059 0.045 13 0.059 0.045 14 ... 0.059 0.045 15 16 0.030 0.045 0.045 17 0.045 18 19 0.045 20 0.045 21 0.017 1.000 1.000 1.000 1.000 1.000 1.000 Telstar Communications is going to purchase an asset for $320,000 that will produce $150,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12- 12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years Year 1 Year 2 Year 3 Year 4 Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow