Ano prethodnota costo 1.500.000, which will be deprecated as a tear asset under MACRS. The...

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Ano prethodnota costo 1.500.000, which will be deprecated as a tear asset under MACRS. The project in toen net profits before depreciation and test 250.000 the 10 years of the net. The firm is subject to a percentrate on ordinary comando formal pain. The annual increment for a chow from to forew MALES LATE Recovery year yor years 10 201 14 om 45 32 25 18 + 1 4 11 14 7 12 12 5 + . 3 . 9 . 9 0.0.0 DOO O An expansion project involves the purchase of a new asset at a cost of $1.500,000, which will be deprecated as a 10 year asset under MACRS. The project is expected to yield annualnet profits before depreciation and taxes of $250,000 over the 10 year useful life of the asset. The firm is subject to a 40 percent tax rate on ordinary income and on long term capital gains The annual incremental after-tax cash flow from operations for year 2 is MACRS RATE Recovery 3 years 5 years 7 years 10 year Year 1 339 20% 104 2 45 32 25 18 3 15 19 18 14 4 7 12 12 12 149 5 12 9 9 6 5 9 R 9 7 6 9 10 11

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