Table: Modified ACRS depreciation allowances (MACRS) Class Three-year Five-year Seven-year Most industrial equipment Examples Equipment used in research Autos, computers Property class Three-year 33.33% 44.45 14.81 7.41 Year Five-year 20.00% 32.00 19.20 11.52 11.52 5.76 Seven-year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 4 1. A proposed new project has projected sales of $164,000, costs of $87,000, and depreciation of $15,200. The tax rate is 35 percent. Calculate the operating cash flow using the four different approaches. What is the depreciation tax shield? 2. A project has projected sales of $62,000, costs of $48,000, depreciation expense of $6,200, and a tax rate of 34 percent. Calculate the operating cash flow using the four different approaches. What is the depreciation tax shield? 3. A piece of newly purchased industrial equipment costs $854,000. 1). Assume the equipment is depreciated straight-line to zero over its seven-year tax life. What is the depreciation expense in Year 4 for this equipment? What is the book value at the end of Year 5 for this equipment