Will Do, Inc. just purchased some equipment at a cost of $650,000. What is the proper methodology for computing the depreciation expense for year 3 if the equipment is classified as 5-year property for MACRS?

MACRS 5-year property

Year Rate

1 20.00%

2 32.00%

3 19.20%

4 11.52%

5 11.52%

6 5.76%

		$650,000 (1-.20) (1-.32)
		$650,000 (1+.20) (1+.32) (1+.192)
		$650,000 (1-.20) (1-.32) (1-.192)
		$650,000 .192