Question: Kendall Industries is considering purchasing a new Widget Making Machine. The cost of the machine will be $124,702 and it will cost $18,260 to install

Kendall Industries is considering purchasing a new Widget Making Machine. The cost of the machine will be $124,702 and it will cost $18,260 to install the machinery. They plan to use the machine for 5 years and it will be depreciated based on the MACRs 5 year schedule. At the end of five years, they expect to be able to sell the machine for $20,000. What is the depreciation expense the firm is able to take in year 2?

MACRs 5 Year Schedule

Year	%
1	20.00%
2	32.00%
3	19.20%
4	11.52%
5	11.52%
6	5.76%

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