3. (29 pts) (NOTE: You do not need a cash flow diagram for this problem.) The following financial information applies to your company for fiscal year 2017:

Sales revenues, $3,800,000

Labor, $790,000

Depreciation allowed in 2017 for existing assets purchased prior to 2017, $80,000

On January 2, 2017, you purchased $190,000 of equipment classified as 7-year MACRS assets

On September 23, 2017, you purchased $280,000 of equipment classified as 5-year MACRS assets

Interest expense, $10,200.

a) Calculate the total depreciation expenses allowed in 2017.

b) Calculate the taxes your company owes for 2017 and your net income for 2017 (assume 21% tax rate).

Please answer in format below. Please show all work:

1. Cash flow diagram of your problem (unless stated otherwise)

2. Specify the model/equation used [e.g. P=F(1+i)-N ]

3. Specify the values of each parameter [e.g. i=0.05 or 5% ]

4. Show your work for how you calculate your numerical results.

5. Report dollar value with cents (e.g. $253.12),

6. Answer the question of the problem with a complete sentence that includes your numerical justification.