[The following information applies to the questions displayed below.) Manning Corporation is considering a new project requiring a $110,000 investment in test equipment with no salvage value. The project would produce $71,000 of pretax income before depreciation at the end of each of the next six years. The company's income tax rate is 36%. In compiling its tax return and computing its income tax payments, the company can choose between the two alternative depreciation schedules shown in the table. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use MACRS) (Use appropriate factor(s) from the tables provided.) Straight-Line Depreciation Depreciation* MACRS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Totals $ 11,000 22,000 22,000 22,000 22,000 11,000 $110,000 $ 22,000 35,200 21,120 12,672 12,672 6,336 $110,000 The modified accelerated cost recovery system (MACRS) for depreciation is discussed in Chapter 8 equired . Complete the following table assuming use of straight-line depreciation. Net cash flow equals the amount of ncome before depreciation minus the income taxes. axable Income ash De De Taxes Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 2. Complete the following table assuming use of MACRS depreciation. Net cash flow equals the income amount before depreciation minus the income taxes. Income Before MACRS Taxable Income Net Cash Taxes Depreciation Depreciation Income Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 3. Compute the net present value of the investment if straight-line depreciation is used. Use 8% as the discount rate Chart Values are Based on: Year Net Cash Inflow x PV Factor Present Value Net present value 4. Compute the net present value of the investment if MACRS depreciation is used. Use 8% as the discount rate. Chart Values are Based on: Year Net Cash Inflow | x | PV Factor Present Value Net present value