Year to switch from declining balance to straight lineConsider a five-year MACRS asset purchased at $90,000. (Note that a five-year MACRS property class is depreciated over six years due to the half-year convention. The applicable salvage values would be $44,000 in year 3, $36,000 in year 5, and $2,000 in year 6.) Compute the gain or loss amount when the asset is disposed of in Year 3, Year 5, and Year 6. с c Class 3 5 7 10 15 20 Depreciation Year n 200% 200% 200% 200% 150% 150% rate 1 33.33 20.00 14.29 10.00 5.00 3.750 2 44.45 32.00 24.49 18.00 9.50 7.219 3 4 5 6 14.81 19.20 17.49 14.40 8.55 6.677 7.41 11.52 12.49 11.52 7.70 6.177 11.52 8.93* 9.22 6.93 5.713 5.76 8.92 7.37 6.23 5.285 7 8.93 6.55" 5.90° 4.888 4567% 8 9 10 11 12 13 14 15 4.46 6.55 5.90 4.522 6.56 5.91 4.462" 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 5.91 4.462 5.90 4.461 5.91 4.462 16 17 18 19 20 21 2.95 4.461 4.462 4.461 4.462 4.461 2.231 Year to switch from declining balance to straight line
Year to switch from declining balance to straight lineConsider a five-year MACRS asset purchased at $90,000. (Note that a five-year MACRS property class is depreciated over six years due to the half-year convention. The applicable salvage values would be $44,000 in year 3, $36,000 in year 5, and $2,000 in year 6.) Compute the gain or loss amount when the asset is disposed of in Year 3, Year 5, and Year 6. с c Class 3 5 7 10 15 20 Depreciation Year n 200% 200% 200% 200% 150% 150% rate 1 33.33 20.00 14.29 10.00 5.00 3.750 2 44.45 32.00 24.49 18.00 9.50 7.219 3 4 5 6 14.81 19.20 17.49 14.40 8.55 6.677 7.41 11.52 12.49 11.52 7.70 6.177 11.52 8.93* 9.22 6.93 5.713 5.76 8.92 7.37 6.23 5.285 7 8.93 6.55" 5.90° 4.888 4567% 8 9 10 11 12 13 14 15 4.46 6.55 5.90 4.522 6.56 5.91 4.462" 6.55 5.90 4.461 3.28 5.91 4.462 5.90 4.461 5.91 4.462 5.90 4.461 5.91 4.462 16 17 18 19 20 21 2.95 4.461 4.462 4.461 4.462 4.461 2.231 Year to switch from declining balance to straight line
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
Related questions
Question
None
Transcribed Image Text:Year to switch from declining balance to straight lineConsider a five-year MACRS asset purchased at $90,000. (Note
that a five-year MACRS property class is depreciated over six years due to the half-year convention. The applicable
salvage values would be $44,000 in year 3, $36,000 in year 5, and $2,000 in year 6.) Compute the gain or loss amount
when the asset is disposed of in Year 3, Year 5, and Year 6.
J
c
Class
3
5
7
10
15
20
Depreciation
Year n
200%
200%
200%
200%
150%
150%
rate
1
33.33
20.00
14.29
10.00
5.00
3.750
2
44.45
32.00
24.49
18.00
9.50
7.219
3
14.81"
19.20
17.49
14.40
8.55
6.677
4
7.41
11.52'
12.49
11.52
7.70
6.177
5
11.52
8.93
9.22
6.93
5.713
6
5.76
8.92
7.37
6.23
5.285
7
8.93
6.55*
5.90
4.888
8
4.46
6.55
5.90
4.522
9
6.56
5.91
4.462"
10
6.55
5.90
4.461
11
3.28
5.91
4.462
12
5.90
4.461
13
5.91
4.462
14
5.90
4.461
15
5.91
4.462
16
2.95
4.461
17
4.462
18
4.461
19
4.462
20
4.461
21
2.231
Year to switch from declining balance to straight line
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education