TELCO Corp has leased some industrial land near its plant. It is building a small warehouse on

Question:

TELCO Corp has leased some industrial land near its plant. It is building a small warehouse on the site at a cost of $250,000. The building will be ready for use January 1. The lease will expire 15 years after the building is occupied. The warehouse will belong at that time to the landowner, with the result that there will be no to TELCO. The warehouse is to be depreciated either by MACRS or SOYD depreciation. If 10% interest is appropriate, which depreciation method should be selected? Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...