Zoom Car Corporation (ZCC) plans to purchase approximately 100 vehicles on December 31, 2015, for $1.5 million, plus 11 percent total sales tax. ZCC expects to use the vehicles for 5 years and then sell them for approximately $315,000. ZCC anticipates the following average vehicle use over each year ended December 3 2016 2017 2018 2019 2020 Miles per year 15,000 20,000 3,750 3,750 2,500 To finance the purchase, ZCC signed a 5-year promissory note on December 31, 2015, for $1.35 million, with interest paid annually at the market interest rate of 6 percent. The note carries loan covenants that require ZCC to maintain a minimum times interest earned ratio of 3.0 and a minimum fixed asset turnover ratio of 1.0. ZCC forecasts that the company will generate the following sales and preliminary earnings (prior to recording depreciation on the vehicles and interest on the note). (For purposes of this question, ignore income tax.) (in 000s) 2016 2017 2018 2019 2020 1,500 $2,000 $2,300 $2,400 $2,500 Sales Revenue Income before Depreciation and 1,150 1,250 1,350 750 950 Interest Expense Required: 1 Calculate the amount of interest expense that would be recorded each year. Answer is complete and correct Interest 81,000 per year ense 2. Calculate the depreciation expense that would be recorded each year, using the following depreciation methods: (a)Straight-line Answer is complete and correct Straight-line 270,000 per year Depreciation (b)Double-declining balance (Do not round intermediate calculations.) Answer is complete and correct Depreciation Expense 2016 666,000 2017 399,600 2018 239,760 2019 44,640 2020