A gas-powered electric generator is purchased by a public utility as part of an expansion program. It is expected to be useful, with proper maintenance, for an estimated 30 years. The cost is $15.5 million, installed. The salvage value at the end of 30 years is expected to be 10.5% of the original cost. a. What is the MACRS-GDS property class? b. Determine the depreciation deduction (d;) and the unrecovered investment (B;) for years 1, 5, and the last depreciable year of the generator. d1 = $ B1 = $ d5 = $ B5 = $ diast = $ , Blast year = $ year Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. Tolerance is ± 100.

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Chapter1: Making Economics Decisions
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A gas-powered electric generator is purchased by a public utility as part of an expansion program. It is expected to be useful, with
proper maintenance, for an estimated 30 years. The cost is $15.5 million, installed. The salvage value at the end of 30 years is expected
to be 10.5% of the original cost.
a. What is the MACRS-GDS property class?
b. Determine the depreciation deduction (d;) and the unrecovered investment (B;) for years 1,5, and the last depreciable year of the
generator.
d1 = $
B1 = $
d5 = $
B5 = $
diast
= $
Blast year = $
year
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. Tolerance is ± 100.
Transcribed Image Text:A gas-powered electric generator is purchased by a public utility as part of an expansion program. It is expected to be useful, with proper maintenance, for an estimated 30 years. The cost is $15.5 million, installed. The salvage value at the end of 30 years is expected to be 10.5% of the original cost. a. What is the MACRS-GDS property class? b. Determine the depreciation deduction (d;) and the unrecovered investment (B;) for years 1,5, and the last depreciable year of the generator. d1 = $ B1 = $ d5 = $ B5 = $ diast = $ Blast year = $ year Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. Tolerance is ± 100.
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