Telstar Communications is going to purchase an asset for $780,000 that will produce $380,000 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. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow Answer is complete but not entirely correct. Year 1 Year 2 Year 3 Year 4 $ 380,000 $ 380.000 $ 380.000 $ 380,000 259,974 346.710 115,518 57,798 $ 120,026 $ 33.290 $ 264.482 1$ 322,202 30,007 8,322 66,121 80,551 I$ 90,019 $ 24.968 $ 198.361 $ 241,651 259,974 346,710 115,518 57,798 349,993 $ 371 678 $ 313 879 $ 299.449 Depreciation 3-Year 5-Year 7-Year Year MACRS MACRS MACRS 10-Year 15-Year 20-Year MACRS MACRS MACRS 1 0.333 0.200 0.143 0.100 0.050 0.038 2 0.445 0.320 0.245 0.180 0.095 0.072 3 0.148 0.192 0.175 0.144 0.086 0.067 4 0.074 0.115 0.125 0.115 0.077 0.062 567 0.115 0.089 0.092 0.069 0.057 0.058 0.089 0.074 0.062 0.053 0.089 0.066 0.059 0.045 8 9 0.045 0.066 0.059 0.045 0.065 0.059 0.045 10 0.065 0.059 0.045 11 0.033 0.059 0.045 12 0.059 0.045 13 0.059 0.045 14 0.059 0.045 15 0.059 0.045 16 0.030 0.045 17 0.045 16 0.045 19 0.045 20 0.045 21 0.017 1.000 1.000 1.000 1.000 1.000 1.000