A firm is investing in an equipment which falls in 5-years MACRS. The cost o the machine is$200,000 and the firm spent $20,000 for shipping, at the end of its life the machine could be sellfor $30,000. If the firm is in 34% tax bracket compute the tax savings from depreciation in year-5.$ 14,960.00$ 13,600.00$11,333.33$ 8,616.96a.b.C.d.

Using 5 Year, Half Yearly Convention method for equipment under MACRS Depreciation Recovery…

Answered: - If the firm is in 34% tax bracket…

Business

Accounting

- If the firm is in 34% tax bracket compute the tax savings from depreciation in year-5.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A firm is investing in an equipment which falls in 5-years MACRS. The cost o the machine is
$200,000 and the firm spent $20,000 for shipping, at the end of its life the machine could be sell
for $30,000. If the firm is in 34% tax bracket compute the tax savings from depreciation in year-5.
$ 14,960.00
$ 13,600.00
$11,333.33
$ 8,616.96
a.
b.
C.
d.

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