a. Calculate the annual MACRS depreciation for a machine in the 7-year MACRS asset class, assuming that

Question:

a. Calculate the annual MACRS depreciation for a machine in the 7-year MACRS asset class, assuming that the asset costs $20,000.
b. If you knew that the asset had an expected of $2,000 at the end of its 12-year economic life, would your answer to part a change?

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...