Calculate the earnings before depreciation and taxes

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Reference no: EM132025339

Telstar Communications is going to purchase an asset for $800,000 that will produce $390,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12-12. (This represents four years of depreciation based on the half-year convention.)

The firm is in a 36 percent tax bracket. Fill in the schedule below for the next four years.

(Input all amounts as positive values. Round your answers to the nearest whole dollar amount.)

Year 1 Year 2 Year 3 Year 4

Earnings before depreciation and taxes

Depreciation Earnings before taxes

Taxes Earnings after taxes

Depreciation Cash flow

Reference no: EM132025339

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