The Summit Petroleum Corpo The cost is $80,000 and the asset will provide the following stream of earnings before deprecation and taxes for the next four vears: ration will purchase as asset that qualifies for three-year MACRS depreciation. Year MACRS depreciation rate EBIT S36,000 40,000 31,000 19,000 445 148 .074 Salvage value of the asset will be zero and the firm is on a 35 percent tax bracket and has an 11 percent cost of capital. 1. Provide expected cash flows for the next 4 years. 2. Should it purchase the asset? Answer the question according to the NPV method. 3. What are the payback period and profitability index respectively