Telstar Communications is going to purchase an asset for $360,000 that will produce $170,000 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 2 Year 3 Year 4 $ Year 1 360,000 0 $ 360,000 S 0 S 0 $ 0 Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow $ 360,000 $ $ 0 $ 0 S 360,000 $ 0 S 0 $ 0 Table 12-12 Depreciation percentages (expressed in decimals) Depreciation Year 3-Year MACRS 20-Year MACRS 1 5-Year MACRS 0.200 0.320 0.192 0.333 0.445 0.148 0.074 2 3 7-Year MACRS 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 4 0.115 5 6 7 0.115 0.058 10-Year MACRS 0.100 0.180 0.144 0.115 0.092 0.074 0.066 0.066 0.065 0.065 0.033 15-Year MACRS 0.050 0.095 0.086 0.077 0.069 0.062 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.030 8 9 10 11 12 13 14 15 0.038 0.072 0.067 0.062 0.057 0.053 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.017 1.000 16 17 18 19 20 21 ........ 1.000 1.000 1.000 1.000 1.000