Question: According to the Modified Accelerated Cost Recovery System MACRS of

According to the Modified Accelerated Cost Recovery System (MACRS) of depreciation imposed by U.S. tax law, autos and computers must be depreciated the following way for tax purposes:
What is the present value of the interest tax shield from the purchase of an automobile for $50,000, with a cost of capital of 10 percent and a tax rate of 34 percent?
What would be the effect of a change in the tax law from MACRS to straight line depreciation?

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  • CreatedMarch 27, 2015
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