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A manufacturer of aerospace products purchased two flexible assembly cells for $500,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $52,000. a. Determine the cost basis of the two cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year four? d. If the cells are sold to another company for $150,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). a. The cost basis of the two cells is $ 1,086 thousand. (Round to the nearest whole number.) b. The class life of the cells is 10 years. (Round to the nearest whole number.) c. The MACRS depreciation in year four is $-200.4 thousand. (Round to the nearest whole number.)

A manufacturer of aerospace products purchased two flexible assembly cells for $500,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $52,000. a. Determine the cost basis of the two cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year four? d. If the cells are sold to another company for $150,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). a. The cost basis of the two cells is $ 1,086 thousand. (Round to the nearest whole number.) b. The class life of the cells is 10 years. (Round to the nearest whole number.) c. The MACRS depreciation in year four is $-200.4 thousand. (Round to the nearest whole number.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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A manufacturer of aerospace products purchased two flexible assembly cells for $500,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $52,000. a. Determine the cost basis of the two cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year four? d. If the cells are sold to another company for $150,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). a. The cost basis of the two cells is $ 1,086 thousand. (Round to the nearest whole number.) b. The class life of the cells is 10 years. (Round to the nearest whole number.) c. The MACRS depreciation in year four is $-200.4 thousand. (Round to the nearest whole number.)
Transcribed Image Text:A manufacturer of aerospace products purchased two flexible assembly cells for $500,000 each. Delivery and insurance charges were $34,000, and installation of the cells cost another $52,000. a. Determine the cost basis of the two cells. b. What is the class life of the cells? c. What is the MACRS depreciation in year four? d. If the cells are sold to another company for $150,000 each at the end of year six, how much is the recaptured depreciation? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). a. The cost basis of the two cells is $ 1,086 thousand. (Round to the nearest whole number.) b. The class life of the cells is 10 years. (Round to the nearest whole number.) c. The MACRS depreciation in year four is $-200.4 thousand. (Round to the nearest whole number.)
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