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Section B: Long Questions (50 marks) Answer ALL questions.

1. Caesar Inc. purchased a machine for its factory on June 6, 2016 for $110,000. The machine is expected to have an estimated useful life of ten years with a residual value of $10,000.

1. Compute the depreciation for 2016 and 2017 using (8 marks)

i) The straight-line method

ii) The double-declining balance method.

2. Elaborate what situation would be beneficial to the firms adopting (4 marks) accelerated depreciation methods.