Use Scenario 2 to answer questions 2A, and 2B Senario 2: ABC firm expanded one of its manufacturing operations inside an existing building in year 2015. New processing and packaging equipment was purchased in 2015 for $800,000. Sales revenue for the year was $1.25 million. Operating expenses for the year, not including capital expenditures or depreciation, were $360,000. The new equipment has a 7-year MACRS life and uses accelerated depreciation. (Note: use the 2016 corporate tax rate schedule. )

2A. What is the value of depreciation recorded for the year 2015?

2B. What is the net cash flow for the year 2015?

4-May-17 Corporate Tax Rate Schedule, 2016 Of the Amount Over $0 Taxable Income Over But Not Over Tax ls 50,000 50,000 75,000 $7,500 + 75,000 100,000 13,750 + 100,000 335,000 22.250 + 335,000 10,000,000 113,900 + 10,000,000 15,000,000 3,400,000 + 15,000,000 18,333,333 5,150,000 + 18,333,333 15% 25% 34% 39% 34% 35% 38% 35% $50,000 75,000 100,000 335,000 10,000,000 15,000,000 Source: Internal Revenue Service, 2016 Instructions for Form 1120