Asset Class 00.11 Descriptions of Assets Office furniture and equipment Class Life GDS ADS 10 00.12 Information systems, including computers 6 00.22 00.23 Automobiles, taxis Buses 3 9 7555 10 5 00.241 Light general purpose trucks 5 95595 00.242 Heavy general purpose trucks 6 5 6 00.26 Tractor units for use over the road 4 3 4 01.1 Agriculture 10 7 10 10.0 Mining 10 7 10 13.2 Production of petroleum and natural gas 14 7 14 13.3 Petroleum refining 16 10 16 15.0 Construction 6 22.3 Manufacture of carpets 9 24.4 Manufacture of wood products and furniture 10 28.0 Manufacture of chemicals and allied products 9.5 30.1 Manufacture of rubber products 14 32.2 Manufacture of cement 20 15 555555 6 9 7 10 9.5 7 14 20 34.0 Manufacture of fabricated metal products 12 7 12 36.0 Manufacture of electronic components, products, and systems 6 5 6 37.11 Manufacture of motor vehicles 12 7 12 37.2 Manufacture of aerospace products 10 7 10 48.12 Telephone central office equipment 18 10 18 49.13 Electric utility steam production plant 28 20 28 49.21 Gas utility distribution facilities 35 20 35 79.0 Recreation 10 7 10 GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) Year 3-year 5-year 7-year 10-year 15-year 20-year 1 0.3333 0.2000 0.1429 0.1000 0.0500 0.0375 2 0.4445 0.3200 0.2449 0.1800 0.0950 0.0722 3 0.1481 0.1920 0.1749 0.1440 0.0855 0.0668 4 0.0741 0.1152 0.1249 0.1152 0.0770 0.0618 5 0.1152 0.0893 0.0922 0.0693 0.0571 6 0.0576 0.0892 0.0737 0.0623 0.0528 7 0.0893 0.0655 0.0590 0.0489 8 0.0446 0.0655 0.0590 0.0452 9 0.0656 0.0591 0.0447 10 11 12 0.0655 0.0590 0.0447 0.0328 0.0591 0.0446 0.0590 0.0446 13 14 15 16 17 18 19 20 21 0.0591 0.0446 0.0590 0.0446 0.0591 0.0446 0.0295 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223
Asset Class 00.11 Descriptions of Assets Office furniture and equipment Class Life GDS ADS 10 00.12 Information systems, including computers 6 00.22 00.23 Automobiles, taxis Buses 3 9 7555 10 5 00.241 Light general purpose trucks 5 95595 00.242 Heavy general purpose trucks 6 5 6 00.26 Tractor units for use over the road 4 3 4 01.1 Agriculture 10 7 10 10.0 Mining 10 7 10 13.2 Production of petroleum and natural gas 14 7 14 13.3 Petroleum refining 16 10 16 15.0 Construction 6 22.3 Manufacture of carpets 9 24.4 Manufacture of wood products and furniture 10 28.0 Manufacture of chemicals and allied products 9.5 30.1 Manufacture of rubber products 14 32.2 Manufacture of cement 20 15 555555 6 9 7 10 9.5 7 14 20 34.0 Manufacture of fabricated metal products 12 7 12 36.0 Manufacture of electronic components, products, and systems 6 5 6 37.11 Manufacture of motor vehicles 12 7 12 37.2 Manufacture of aerospace products 10 7 10 48.12 Telephone central office equipment 18 10 18 49.13 Electric utility steam production plant 28 20 28 49.21 Gas utility distribution facilities 35 20 35 79.0 Recreation 10 7 10 GDS Recovery Rates (r) for the Six Personal Property Classes Recovery Period (and Property Class) Year 3-year 5-year 7-year 10-year 15-year 20-year 1 0.3333 0.2000 0.1429 0.1000 0.0500 0.0375 2 0.4445 0.3200 0.2449 0.1800 0.0950 0.0722 3 0.1481 0.1920 0.1749 0.1440 0.0855 0.0668 4 0.0741 0.1152 0.1249 0.1152 0.0770 0.0618 5 0.1152 0.0893 0.0922 0.0693 0.0571 6 0.0576 0.0892 0.0737 0.0623 0.0528 7 0.0893 0.0655 0.0590 0.0489 8 0.0446 0.0655 0.0590 0.0452 9 0.0656 0.0591 0.0447 10 11 12 0.0655 0.0590 0.0447 0.0328 0.0591 0.0446 0.0590 0.0446 13 14 15 16 17 18 19 20 21 0.0591 0.0446 0.0590 0.0446 0.0591 0.0446 0.0295 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter2: The One Lesson Of Business
Section: Chapter Questions
Problem 2.1IP
Question
Your company has purchased a large new trucktractor for over-the-road use (asset class 00.26). It has a cost basis of $176,000. With additional options costing $14,000, the cost basis for depreciation purposes is $190,000. Its MV at the end of six years is estimated as $41,000. Assume it will be
![Asset Class
00.11
Descriptions of Assets
Office furniture and equipment
Class Life
GDS
ADS
10
00.12
Information systems, including computers
6
00.22
00.23
Automobiles, taxis
Buses
3
9
7555
10
5
00.241
Light general purpose trucks
5
95595
00.242
Heavy general purpose trucks
6
5
6
00.26
Tractor units for use over the road
4
3
4
01.1
Agriculture
10
7
10
10.0
Mining
10
7
10
13.2
Production of petroleum and natural gas
14
7
14
13.3
Petroleum refining
16
10
16
15.0
Construction
6
22.3
Manufacture of carpets
9
24.4
Manufacture of wood products and furniture
10
28.0
Manufacture of chemicals and allied products
9.5
30.1
Manufacture of rubber products
14
32.2
Manufacture of cement
20
15
555555
6
9
7
10
9.5
7
14
20
34.0
Manufacture of fabricated metal products
12
7
12
36.0
Manufacture of electronic components, products, and systems
6
5
6
37.11
Manufacture of motor vehicles
12
7
12
37.2
Manufacture of aerospace products
10
7
10
48.12
Telephone central office equipment
18
10
18
49.13
Electric utility steam production plant
28
20
28
49.21
Gas utility distribution facilities
35
20
35
79.0
Recreation
10
7
10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F92dd192b-2b85-4e23-91c3-a8e23aec13bb%2F1c2df7a2-58da-4f12-a77d-6584b9a6ef61%2Fao9fwvw_processed.png&w=3840&q=75)
Transcribed Image Text:Asset Class
00.11
Descriptions of Assets
Office furniture and equipment
Class Life
GDS
ADS
10
00.12
Information systems, including computers
6
00.22
00.23
Automobiles, taxis
Buses
3
9
7555
10
5
00.241
Light general purpose trucks
5
95595
00.242
Heavy general purpose trucks
6
5
6
00.26
Tractor units for use over the road
4
3
4
01.1
Agriculture
10
7
10
10.0
Mining
10
7
10
13.2
Production of petroleum and natural gas
14
7
14
13.3
Petroleum refining
16
10
16
15.0
Construction
6
22.3
Manufacture of carpets
9
24.4
Manufacture of wood products and furniture
10
28.0
Manufacture of chemicals and allied products
9.5
30.1
Manufacture of rubber products
14
32.2
Manufacture of cement
20
15
555555
6
9
7
10
9.5
7
14
20
34.0
Manufacture of fabricated metal products
12
7
12
36.0
Manufacture of electronic components, products, and systems
6
5
6
37.11
Manufacture of motor vehicles
12
7
12
37.2
Manufacture of aerospace products
10
7
10
48.12
Telephone central office equipment
18
10
18
49.13
Electric utility steam production plant
28
20
28
49.21
Gas utility distribution facilities
35
20
35
79.0
Recreation
10
7
10
![GDS Recovery Rates (r) for the Six Personal Property Classes
Recovery Period (and Property Class)
Year
3-year
5-year
7-year
10-year
15-year
20-year
1
0.3333
0.2000
0.1429
0.1000
0.0500
0.0375
2
0.4445
0.3200
0.2449
0.1800
0.0950
0.0722
3
0.1481
0.1920
0.1749
0.1440
0.0855
0.0668
4
0.0741
0.1152
0.1249
0.1152
0.0770
0.0618
5
0.1152
0.0893
0.0922
0.0693
0.0571
6
0.0576
0.0892
0.0737
0.0623
0.0528
7
0.0893
0.0655
0.0590
0.0489
8
0.0446
0.0655
0.0590
0.0452
9
0.0656
0.0591
0.0447
10
11
12
0.0655
0.0590
0.0447
0.0328
0.0591
0.0446
0.0590
0.0446
13
14
15
16
17
18
19
20
21
0.0591
0.0446
0.0590
0.0446
0.0591
0.0446
0.0295
0.0446
0.0446
0.0446
0.0446
0.0446
0.0223](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F92dd192b-2b85-4e23-91c3-a8e23aec13bb%2F1c2df7a2-58da-4f12-a77d-6584b9a6ef61%2Fl0qana_processed.png&w=3840&q=75)
Transcribed Image Text:GDS Recovery Rates (r) for the Six Personal Property Classes
Recovery Period (and Property Class)
Year
3-year
5-year
7-year
10-year
15-year
20-year
1
0.3333
0.2000
0.1429
0.1000
0.0500
0.0375
2
0.4445
0.3200
0.2449
0.1800
0.0950
0.0722
3
0.1481
0.1920
0.1749
0.1440
0.0855
0.0668
4
0.0741
0.1152
0.1249
0.1152
0.0770
0.0618
5
0.1152
0.0893
0.0922
0.0693
0.0571
6
0.0576
0.0892
0.0737
0.0623
0.0528
7
0.0893
0.0655
0.0590
0.0489
8
0.0446
0.0655
0.0590
0.0452
9
0.0656
0.0591
0.0447
10
11
12
0.0655
0.0590
0.0447
0.0328
0.0591
0.0446
0.0590
0.0446
13
14
15
16
17
18
19
20
21
0.0591
0.0446
0.0590
0.0446
0.0591
0.0446
0.0295
0.0446
0.0446
0.0446
0.0446
0.0446
0.0223
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