Half-year convention deprecation

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KOOKIS, Inc., has developed a new cooky. The firm is planning to spend $60,000 on a new oven to produce the new cooky for 3 years. The machine has an expected life of three years, a $10,000 estimated resale value, and falls under the straight-line 3-year class life. Revenue from the new cooky is expected to be $50,000 per year, with costs of $20,000 per year. The firm has a tax rate of 40 percent, and it expects net working capital to increase by $10,000 at the beginning of the project. What will the cash flows for this project be?

Following half-year convention deprecation, what is the depreciation for year 1-3?

Reference no: EM13769122

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