Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $66,000. The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $28,800. A new piece of equipment will cost $156,000. It also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 1212. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year		Cash Savings
1		$	66,000
2			58,000
3			56,000
4			54,000
5			51,000
6			40,000

The firms tax rate is 40 percent and the cost of capital is 9 percent.

i. Compute the aftertax benefits of the cost savings. (Enter the aftertax factor as a decimal rounded to 2 decimal places. Round all other answers to the nearest whole dollar.) Year

	Savings	(1 Tax Rate)	Aftertax Savings
1	$66,000
2	58,000
3	56,000
4	54,000
5	51000
6	40000