Telstar Communications is going to purchase an asset for $740,000 that will produce $360,000 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 1212. (This represents four years of depreciation based on the half-year convention.) The firm is in a 35 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	$0	$0	$0	$0
Taxes
Earnings after taxes	$0	$0	$0	$0
Depreciation
Cash flow	$0	$