A b c d and e

Markov Manufacturing recently spent 515 million to purchase some equipment used in the mamufacture of disk drives. The fim expects that this equipment will have a useful life of five years, and its marginal corporate tax rate is 21%. The company plans to use straight-line depreciation Complete the sfeps below using cell references to given data or previous calculations In some cases, a simple cell reference is all you need. To copypaste a formula across a row or down a colamn, an absolute cell reference or a mixed cell roference may be preferred. Hf specifte Bxcel fimction is to be ised, the clirections will specif the use of that function. Do not type in numerical data imfo a cell or function, Instead, make a rejerence to the cell in which the data is found 3lake jow computatians onst in the bhie cells highlighted below. In all cases, tonless otherwise directed, wee the earliest plpperance of the dota mvor formulas, usually the Grven Data section 3. What is the anmual depreciation expense associated with thas equipment? b. What is the anmual depreciation tax sheeld? c. Rather than straight-line depreciation, suppose Markov wall use the MACRS depreciation method for the five-year life of the property. Calculate the depteciation tax shield each year for this equipment under this accelerated depreciation schedule. d. If Markov has a choice between straight-line and MLACRS depreciation schedules, and its margint? corporate tax rate is expected to remain constant, which schedule should it choose? Why? e. How niaght your answer to part (d) change if Markov anticipates that its marginal comotate tax tate will increase substantizlly over the next five years? 3. What is the anmual depteciation expense associated with this equipment? Depreciation (million) h. What is the anmal depreciation tax shield? Tas shield (million) 6. Pather than straight Linie depteciation, suppose Markov- will use the M.ACRS depreciation method for the five-year life of the propenty. Calculate the deprecation tar shitid each yrar for thas equipment. under this accelerated Srpreciation sehe dule. a. What is the annual depreciation expense associated with this equipment? Depreciation (million) b. What is the annual depreciation tax shield? Tax shield (million) c. Rather than straight-line depreciation, suppose Markov will use the MACRS depreciation method for the five-year life of the property. Calculate the depreciation tax shield each year for this equipment under this accelerated depreciation schedule. d. If Markov has a choice between straight-line and MACRS depreciation schedules, and its marginal corporate tax rate is expected to remain constant, which schedule should it choose? Why? Markov should prefer: depreciation. It leads to NPV e. How might your answer to part (d) change if Markov anticipates that its marginal corporate tax rate will increase substantially over the next five years? Matkov may be better off clauming: depreciation expenses in later years. Requirements 1 In cell D17, by using cell references, calculate the anmual depreciation expense (I pt.). 2 In cell D21, by using cell references, calculate the annual depreciation tax shield (1pt.) 3 In cell range F29:129, by using cell references, calculate the annual depreciation expense under MACRS for years 0.5, respectively ( 6 pt.). 4 In cell range E30:130, by uring cell references, calculate the annual depreciation tax ahield under MACRS for years 0.5, respectively (6pt ). 5 In cell D34, type either MACRS or Straight line depending on your preferred depreciation schedule (1 pt.) 6 In cell H34, type either higher, lower or aame depending on how your preferred depreciation