Bill Cavitt owns a data processing company. He plans to buy an additional computer for $20,000, use the computer for 3 years, and sell it for $10,000. He expects that use of the computer will produce a net income of $8000 per year. The combined federal and state incremental tax rate is 45%. Using MACRS depreciation, complete Table P12-41 to determine the net present worth of the after tax cash flow using an interest rate of 12%.

MACRS Depreciation Taxable | | Income income | Tax (45%) | After-Tax Cash Flow Before-Tax Cash Flow -$20.000 +8.000 +8,000 4-8,000 +10,000 Year | worth (12%) Net Present worth =