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Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 5-year 7-year 10-year 15-year 20-year 33.33% 44.45 5.00% 9.50 3.750% 7.219 20.00% 14.29% 10.00% 18.00 32.00 24.49 14.40 8.55 6.677 14.81 7.41 19.20 11.52 11.52 17.49 12.49 11.52 9.22 7.70 6.177 8.93 6.93 5.713 6. 5.76 8.92 7.37 6.23 5.285 6.55 6.55 8.93 5.90 5.90 4.888 4.522 4.46 6.56 5.91 4.462 10 6.55 5.90 4.461 3.28 5.91 5.90 11 4.462 12 4.461 4.462 13 5.91 5.90 4.461 4.462 14 15 5.91 16 2.95 4.461 17 4.462 4.461 18 19 4.462 20 4.461 21 2.231 Table: MACRS Schedule by IRS 12345

Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 5-year 7-year 10-year 15-year 20-year 33.33% 44.45 5.00% 9.50 3.750% 7.219 20.00% 14.29% 10.00% 18.00 32.00 24.49 14.40 8.55 6.677 14.81 7.41 19.20 11.52 11.52 17.49 12.49 11.52 9.22 7.70 6.177 8.93 6.93 5.713 6. 5.76 8.92 7.37 6.23 5.285 6.55 6.55 8.93 5.90 5.90 4.888 4.522 4.46 6.56 5.91 4.462 10 6.55 5.90 4.461 3.28 5.91 5.90 11 4.462 12 4.461 4.462 13 5.91 5.90 4.461 4.462 14 15 5.91 16 2.95 4.461 17 4.462 4.461 18 19 4.462 20 4.461 21 2.231 Table: MACRS Schedule by IRS 12345

Essentials Of Investments
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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NCF practice

a) What is the ncf from the sale of this asset - purchased for $250,000, 7-year property, sold at end of year 6 for $50,000, tax rate = 21%?

basis  = MACRS depreciation (as decimal) * sale price

step 1: sales price - basis = gain/loss

step 2: gain * loss tax rate = tax

step 3: sales price - tax = ncf

Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 5-year 7-year 10-year 15-year 20-year 33.33% 44.45 5.00% 9.50 3.750% 7.219 20.00% 14.29% 10.00% 18.00 32.00 24.49 14.40 8.55 6.677 14.81 7.41 19.20 11.52 11.52 17.49 12.49 11.52 9.22 7.70 6.177 8.93 6.93 5.713 6. 5.76 8.92 7.37 6.23 5.285 6.55 6.55 8.93 5.90 5.90 4.888 4.522 4.46 6.56 5.91 4.462 10 6.55 5.90 4.461 3.28 5.91 5.90 11 4.462 12 4.461 4.462 13 5.91 5.90 4.461 4.462 14 15 5.91 16 2.95 4.461 17 4.462 4.461 18 19 4.462 20 4.461 21 2.231 Table: MACRS Schedule by IRS 12345
Transcribed Image Text:Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 5-year 7-year 10-year 15-year 20-year 33.33% 44.45 5.00% 9.50 3.750% 7.219 20.00% 14.29% 10.00% 18.00 32.00 24.49 14.40 8.55 6.677 14.81 7.41 19.20 11.52 11.52 17.49 12.49 11.52 9.22 7.70 6.177 8.93 6.93 5.713 6. 5.76 8.92 7.37 6.23 5.285 6.55 6.55 8.93 5.90 5.90 4.888 4.522 4.46 6.56 5.91 4.462 10 6.55 5.90 4.461 3.28 5.91 5.90 11 4.462 12 4.461 4.462 13 5.91 5.90 4.461 4.462 14 15 5.91 16 2.95 4.461 17 4.462 4.461 18 19 4.462 20 4.461 21 2.231 Table: MACRS Schedule by IRS 12345
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