Question: Chapman Machine Shop is considering a four-year project to improve its production efficiency. The new machine costs $390,000 and falls in the MACRS five-year class.

Chapman Machine Shop is considering a four-year project to improve its production efficiency. The new machine costs $390,000 and falls in the MACRS five-year class. The MACRS rates are .2, .32, .192, .1152, .1152, and .0576 for Years 1 to 6, respectively. What is the annual depreciation of the machine at the end of Year 3?

A) $67,392

B) $124,800

C) $44,928

D) $78,000

E) $74,880

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