Del Norte Brick Co. is located near the intersection of Texas, New Mexico, and Mexico. Improved access to the company's property is via a small bridge across the Rio Grande. The cost of the bridge was $620,000. Determine the depreciation and book value for year 3 according to the MACRS (Modified Accelerated Cost Recovery System) method. Year I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17-20 21 n=3 33.33 44.45 14.81 7.41 Depreciation Rate (%) for Each MACRS Recovery Period in Years n=5 n=7 n = 10 n=15 20.00 32.00 19.20 11.52 11.52 5.76 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 n = 20 3.75 7.22 6.68 6.18 5.71 5.29 4.89 4.52 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 2.23
Del Norte Brick Co. is located near the intersection of Texas, New Mexico, and Mexico. Improved access to the company's property is via a small bridge across the Rio Grande. The cost of the bridge was $620,000. Determine the depreciation and book value for year 3 according to the MACRS (Modified Accelerated Cost Recovery System) method. Year I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17-20 21 n=3 33.33 44.45 14.81 7.41 Depreciation Rate (%) for Each MACRS Recovery Period in Years n=5 n=7 n = 10 n=15 20.00 32.00 19.20 11.52 11.52 5.76 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 n = 20 3.75 7.22 6.68 6.18 5.71 5.29 4.89 4.52 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 4.46 2.23
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:QUESTION 11
Del Norte Brick Co. is located near the intersection of Texas, New Mexico, and Mexico. Improved access to the company's property is
via a small bridge across the Rio Grande. The cost of the bridge was $620,000. Determine the depreciation and book value for year 3
according to the MACRS (Modified Accelerated Cost Recovery System) method.
Year
12345
6
7
8
9
10
11
12
13
14
15
16
17-20
21
n=3
33.33
44.45
14.81
7.41
Depreciation Rate (%) for Each MACRS Recovery Period in Years
n=5
n=7
n = 10
n=15
20.00
32.00
19.20
11.52
11.52
5.76
14.29
24.49
17.49
12.49
8.93
8.92
8.93
4.46
10.00
18.00
14.40
11.52
9.22
7.37
6.55
6.55
6.56
6.55
3.28
5.00
9.50
8.55
7.70
6.93
6.23
5.90
5.90
5.91
5.90
5.91
5.90
5.91
5.90
5.91
2.95
n = 20
3.75
7.22
6.68
6.18
5.71
5.29
4.89
4.52
4.46
4.46
4.46
4.46
4.46
4.46
4.46
4.46
4.46
2.23
Transcribed Image Text:Asset Description (Personal and Real Property)
Special manufacturing and handling devices, tractors,
racehorses
Computers and peripherals, oil and gas drilling
equipment, construction assets, autos, trucks, buses,
cargo containers, some manufacturing equipment
Office furniture; some manufacturing equipment;
railroad cars, engines, tracks; agricultural machin-
ery; petroleum and natural gas equipment; all
property not in another class
Equipment for water transportation, petroleum refin-
ing, agriculture product processing, durable-goods
manufacturing, shipbuilding
Land improvements, docks, roads, drainage, bridges,
landscaping, pipelines, nuclear power production
equipment, telephone distribution
Municipal sewers, farm buildings, telephone switch-
ing buildings, power production equipment (steam
and hydraulic), water utilities
Residential rental property (house, mobile home)
Nonresidential real property attached to the land, but
not the land itself
The depreciation, (in $)
Round to the nearest two (2) decimal places
GDS
3
5
7
10
15
20
27.5
39
MACRS
n Value, Years
ADS Range
3-5
6-9.5
10-15
15-19
20-24
25-50
40
40
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