the same, or lower? Why 4. What would the company's income before income taxes be in 2018 if ADT had always expensed its expenditures for subscriber acquisition costs? Depreciation Choices and Outcomes. Reddic Co. purchased a new machine on January 1. The following TA 1, 2 information pertains to the purchase: P7.34 Life of asset Salvage value. Purchase price Sales tax Freight cost. Electrical set-up Custom programming Estimated annual labor savings Additional revenue generated. 5 years $ 3,500 35,000 3,000 1.200 800 1,500 3,500 $ 8,000 Required a. Determine the capitalized cost of the new machine. b. Compute annual depreciation, accumulated depreciation, and the machine's book value for the first three years assuming i. Straight-line depreciation ii. Double-declining-balance method Assume the machine is sold for 59,000 at the end of the third year after depreciation has been calculated. Determine the gain or loss assuming i. Straight-line depreciation ii. Double-declining-balance method d. Given your answer in partc if Mulligan was able to perfectly predict the future that the machine would be sold for $9,000 at the end of the third year, which depreciation method should Reddic choose? Ignore taxes