signment Saved Help Save & Exit Submit Check my work Freedom Corporation acquired a fixed asset for $180,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 10% and an income tax rate of 40% (Use Exhibit 12.4. Appendix C. TABLE1 and Appendix C. TABLE 2) Required: 1. What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years-digits (SYD) method rather than the straight-line (SLN) method on this asset? Use the SYD and SLN functions in Excel to calculate depreciation charges. 2. What is the incremental present value of the tax benefits resulting from calculating depreciation using the double-declining-balance (DDB) method rather than the straight-line (SLN) method on this asset? Use the SLN and DDB functions in Excel to calculate depreciation charges. 3. What is the incremental present value of the tax benefits resulting from using MACRS rather than straight-line (SLN) depreciation? The asset qualifies as a 3-year asset. Use the half-year convention. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years digits (SYD) method rather than the straight-line (SLN) method on this asset? Use the SYD and SLN functions in Excel to calculate depreciation charges. (Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar.) Incremental PV of tax savings using SYD depreciation Required 2 Reqd 1 MACRS Depreciation Rates EXHIBIT 12.4 Year 3-year 5-year 7-year 10-year 15-year 20-year 1 33.33 20.00 14.29 10.00 5.00 3.75 2 44.45 32.00 24.49 18.00 9.50 7.22 14.81 19.20 17.49 14.40 8.55 6.68 4 7.41 11.52 12.49 11.52 7.70 6. 18 11.52 8.93 9.22 6.93 5.71 6 5.76 S.92 7.37 6.23 5.28 8,92 6.55 5.90 4.89 8 4.47 6.55 5.90 4.52 6.56 5.91 4.46 10 6.55 5.90 4.46 11 3.28 etc. etc. First yeer of sctch ng to the stra ght-line Source: www.irs.cov/eublicationsip946 method TABLE 2 Present Value of Annulty of $1 10% 11% 12% 13% 14 15% 20% 25% 30% Perlods 4% 5% 6% 7% 94 0.935 0926 0.917 0.909 0.901 0893 0.885 0.877 0870 0.S33 0s00 0.769 0.962 0952 0.943 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.528 1.440 1.361 2 1.SS6 1.859 1.833 1.303 1.783 2.775 2723 2673 2.624 2.577 2.531 2.487 2444 2.402 2.361 2.322 2.283 2.106 1.952 1.816 3 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2914 2855 2.589 2.362 2.166 4 3.630 3.546 3.465 4.100 3.993 3 590 3.791 3.696 3.605 3.517 3433 3.352 2.991 2.689 2.436 5 4452 4.329 4212 5.242 4456 4.355 4.231 4.111 3.998 3.SS9 3.784 3.326 2.951 2.643 6 5.076 4.917 4.767 4623 5.033 4868 4.712 4564 4423 4 288 4.160 3.605 3.161 2.802 7 6.002 5.786 5.582 5.389 5206 5.971 5.747 5.535 5.335 5.146 4968 4.799 4.639 4.487 3 837 3.329 2.925 6.733 6.463 6.210 7.103 6.002 9 7.435 6.515 5995 5.759 5.537 5.328 5.132 4946 4.772 4031 3.463 3.019 6.247 641S 6 145 5.339 5.650 5.42 16 5.019 4.192 3571 3.092 10 S.111 7.722 7.360 7.024 6.710 6.505 6.495 6.207 5933 5.687 5.493 5.234 4.327 3.656 3.147 8.760 S.306 7.S87 11 7.499 7.139 7.161 6314 6 492 6 194 5.9IS 5 660 5.421 4439 3.725 3 190 12 9.385 S.563 S 334 7.943 7.536 9.936 9.394 S.353 13 8.353 7.904 7.487 7.103 6.750 6424 6.122 5.342 5.583 4.533 3.730 3.223 10.563 9 899 9.295 S.745 .244 7.756 7367 6.982 6.628 6.302 6.002 5.724 4611 3.824 3.249 14 8 061 7.606 7.191 6.011 6.462 6.142 5.347 4.675 3.859 3.260 11.11S 10.330 9.712 9.105 15 S.559 3.313 7.324 7.379 6.974 66004 6.265 5.954 4730 3.337 3.203 16 11.652 10.338 10.106 9.447 3.351 S 544 .022 7.549 7.120 6.729 6.373 6.047 4.775 3.910 3.295 17 12.166 11.274 10.477 9.763 9.122 12.659 11.690 10 328 10.059 9.372 .756 3.201 7.702 7 250 6340 6467 6.128 4312 3928 3304 13 13.134 12.035 11.15S 10.336 9.604 950 .36573397360 6935 6550 6. 193 4,343 3,942 331 19 13.590 12462 11470 10.594 9.313 9.129 8514 7.963 7469 7.025 6.623 6.259 4.870 3.954 3316 20 22 14.451 13.163 12.042 11.061 10.2011 9.442 8.772 3.176 7645 7.170 6.743 6 359 4909 3.970 3.323 9.707 985 3 340 7784 7 283 6835 6 434 4937 3.951 3.327 15.247 13.799 12.550 11 469 10.529 24 15 622 14.094 12783 11.654 10 675 9.823 9077 3.422 7343 7.330 6873 6 464 4943 3.935 3329 25 17 292 15.372 13765 12 409 11 253 10.274 9427 S.694 3055 7196 7.003 6566 4979 3.995 3.332 30 18 665 16.374 14 493 12943 11 655 10 567 9644 3$53 3176 7586 7.070 6617 4992 399S 3333 35 19 793 17.159 15 046 13.332 11925 10.757 9 779 8951 3 244 7634 7.105 6642 4997 3999 3.333 40 NoThe pt P y Nidsd leN 1e PV o-d al Present Value of $1. TABLE 1 10% 11 15% 20% 25% 30% 12% 13% 14% 5% 6% 7% 8% 9% Perlods 4% 0.962 0.952 0.943 0.935 0926 0.917 0.909 0.901 0.893 0SS5 0.877 0870 0.833 0.S00 0.769 1 0.925 0.907 0S90 0.S73 0.S57 0.842 0.S26 0S12 0.797 0.7S3 0.769 0.756 0.694 0.640 0.592 2 0.SS9 0 S64 0.S40 0.S16 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.579 0512 0455 3 4 0.S55 0823 0.792 0.763 0.735 0.70S 0.6S3 0.659 0.636 0.613 0.592 0572 04S2 0.410 0.350 5 0.S22 0.784 0747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0519 0497 0.402 0.328 0.269 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0535 0.507 0450 0.456 0.432 0.335 0.262 0.207 6 0.760 0.711 0.665 0.623 0.583 0547 0.513 0482 0 452 0425 0 400 0.376 0.279 0.210 0.159 7 S 0.731 0.677 0.627 0.582 0.540 0502 0.467 0434 0.404 0.376 0.351 0.327 0.233 0.168 0.123 9 0.703 0.645 0.592 0.544 0.500 0460 0.424 0391 0.361 0.333 0.30S 0.284 0.194 0.134 0.094 0.676 0614 055S 0.50S 0.463 0422 0.336 0352 0.322 0295 0.270 0.247 0.162 0.107 0.073 10 11 0.650 0535 0.527 0.475 0.429 0.38S 0.350 0.317 0.237 0261 0.237 0.215 0.135 0036 0.056 0.625 0.557 0.497 0.444 0.397 0.356 0319 0 286 0.257 0.231 0.20 0.187 0.112 0.069 0.043 12 13 0.601 0.530 0.469 0415 0.368 0.326 0.290 0.258 0.229 0.204 0.1S2 0.163 0.093 0.055 0.033 0.577 0505 0.442 0.333 0.340 0.299 0.263 0232 0.205 0.131 0.160 0.141 0.073 0044 0.025 14 0.555 0.4S1 0.417 0.362 0315 0275 0.239 0209 0.133 0.160 0.140 0.123 0.065 0035 0.020 15 0.534 0.458 0.394 0.339 0.292 0.252 0.21S 01SS 0.163 0.141 0.123 0.107 0.054 0028 0.015 16 0.513 0436 0.371 0.317 0270 0.231 0.198 0.1 70 0.146 0.125 0.103 0.093 0.045 0023 0.012 17 1S 0.494 0416 0.350 0.296 0.250 0.212 0.1S0 0.153 0.130 0.111 0.095 0081 0.033 0.013 0.009 0475 0.396 0.331 0.277 0 232 0.194 0.164 0.13S 0.116 0.093 0.083 0070 0.031 0014 0.007 19 0.456 0377 0312 0.253 0.215 0.173 0.149 0124 0. 104 0.037 0.073 0061 0.026 0012 0.005 20 0422 0.342 0.273 0226 0 134 0.150 0.123 0101 0.033 0063 0 056 0.046 0.01S 0007 0.003 22 0.390 0.310 0247 0.197 0.153 0126 0.102 0032 0.066 0.053 0.043 0035 0.013 0005 0.002 24 0.375 0295 0 233 0.184 0.146 0116 0.092 0074 0 059 0047 0 03S 0030 0 010 0 004 0.001 25 0.308 0231 0174 0131 0 099 0075 0.057 0044 0.033 0026 0 020 0015 0 004 0001 0 000 30 0.253 01S1 0 130 0094 0 068 0049 0 036 0026 0019 0014 0010 000S 0.002 0000 0 000 35 0 20S 0 142 0097 0067 0046 0032 0022 0015 0011 0008 0005 0 004 0001 0 000 0000 40 Sor The pesenaue PV factor for penods msepe penad For eangle e PV faoc foc 103ea 0100.e21