Question: please help CDD Corporation is considering replacing an existing asset with a new one. The existing asset was purchased four years ago, had an original

please help

CDD Corporation is considering replacing an existing asset with a new one. The existing asset was purchased four years ago, had an original cost of $80,000 and was depreciated using five-year MACRS. The new asset will cost $200,000 and will also be depreciated using five-year MACRS. The relevant tax rate is 40 percent. What is the incremental depreciation for year 2 after installation of the new replacement asset?

MACRS RATERecovery3 years5 years7 years10 year

year

133%20%14%10%

245322518

315191814

47121212

51299

6598

797

846

96

106

114

a.$38,400

b.$60,000

c.$16,800

d.$26,400

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