Companies A and JB bought identical venturi scrubbers in 2007 tbafc cost $75,000 each. In both applications, the service life was estimated to be 5 years with zero salvage value. The corporate income tax rate for both companies was 50%. Company A used straight-line depreciation and Company B used the MACES method. How much more money did Company B save over the first 3 years of service based on its depreciation procedure?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Companies A and JB bought identical venturi scrubbers in 2007 tbafc cost $75,000 each. In both applications, the service life was estimated to be 5 years with zero salvage value. The corporate income tax rate for both companies was 50%. Company A used straight-line
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