Show the steps to calculate the MACRS rates for 5-year Property TABLE 11-3 MACRS Depreciation for Personal Property: Half-Year ConventionApplicable Percentage for Property ClassRecoveryYear3-Year5-Year7-Year10-Year15-Year20-YearPropertyPropertyPropertyPropertyPropertyProperty33.3320.0014.2910.005.003.75044.4532.0024.4918.009.507.219314.81*19.2017.4914.408.556.67747.4111.52*12.4911.527.706.177511.528.93*9.226.935.7136.5.768.927.376.235.28578.936.55*5.90*4.8884.466.555.904.5229.6.565.914.462*106.555.904.461113.285.914.462125.904.461135.914.462145.904.461155.914.462162.954.461174.462184.461194.462204.461212.231

The depreciation rate is the percentage rate at which an asset is depreciated over its projected…

Answered: TABLE 11-3 MACRS Depreciation for…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What is the maximum bond for a property when the weekly rent is $1200?
A Property is expected to have 5 Year NOI flow of $10,000, $12,000, $15,000, $18,000, and $10,000 and a final (year 5) sale price of $90,000. Using capitalization rate of 12% what is the estimated market value of the property? 97,354 104,664 87,641 100,919 90,724
A depreciable property costing P1,000,000 with original residual value of P100,000 after 10 years, had been revalued at the beginning of 2020 at a replacement cost of P2,100,000. The age of the asset is four years when it was revalued. Prepare all entries at the time of revaluation and at the end of 2020 to record depreciation after revaluation.
A lessee incurred cost to construct a walkway and landscaping to improvea leased property. The useful life of the walkway and landscaping cost isfifteen years. The remaining term of the nonrenewable lease is twentyyears. The walkway and landscaping cost should be A. Capitalized as leasehold improvement and depreciated over twenty years. B. Capitalized as leasehold improvement and depreciated over fifteen years. C. Capitalized as leasehold improvement and expensed in the year in which the lease expires. D. Expensed as incurred.
Two investments involving a granary qualify for different property classes.Investment A costs $70,000 with $3,000 salvage value after 16 years and is depreciated as MACRS-GDS in the 10-year property class. Investment B costs $110,000 with a $4,000 salvage value after 16 years and is in the MACRS-GDS 5-year property class. Operation and maintenance for each is expected to be $18,000 and $14,000 per year, respectively. The income-tax rate is 25%, and MARR is 9% after taxes. a. Determine which alternative is less costly, based upon comparison of after-tax annual worth. b. What must the cost of the second (more expensive) investment be for there to be noeconomic advantage between the two?
Verify the 5- and 7-year property class percentages byapplying the 200% DB approach to a piece of equipmentwith a nominal value of $1,000. For the 7-year propertyclass, in what year is the switch from 200% DB to StraightLine? Only half of the first and last years are considered inthe computations. This means that for a 5-year class property,instead of deducting 100% × (2/5) = 40% in the firstyear, only half (40%/2 = 20%) is deducted.
Q5.
What are the depreciation allowances and book values for the SMP machine using MACRS depreciation with 50% and 100% bonus depreciation?
*attached is the problem REQUIRED: choose the letter What is the interest expense for 2020? a. 200,000b. 115,200c. 106,720d. 0 What is the depreciation for 2020? a. 135,200b. 115,200c. 67,600d. 20,000
A project requires an investment of $800 in a fixed asset that is classified as a five-year asset under MACRS. The project will have a three-year life. Find the depreciation for year three.
A taxpayer wants to place in service a $10,000 asset that is assigned to the five-year class. Compute the MACRS percentages and the depreciation amounts for the asset. Given: Five-year asset, half-year convention, \alpha =40% and S=0 Find: MACRS depreciation percentages Dn for $10,000 asset.
Assume that you purchase a property for $200,000 and it generates annual cash flows of $30,000 in years 1-3; and $45,000 in years 4&5. You are able to sell it at the end of year 5 for $400,000. Calculate the IRR for this investment property.

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