A firm expects to have earnings before depreciation and taxes of $150,000 in each of the next
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A firm expects to have earnings before depreciation and taxes of $150,000 in each of the next four years. There are no interest payments and taxes are at a rate of 25%. It is considering the purchase of an asset costing $120,000 requiring $15,000 in installation costs and having a recovery period of three years. Use the following MACRS percentages for this asset – Yr 1: 33.3%; Yr 2: 44.5%; Yr 3: 14.8%; Yr 4: 4.7%.
Calculate the annual depreciation for year three using the MACRS depreciation percentages.
Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
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