R.K. Boats Inc. has just installed a new hydraulic lift system which is being categorized as a
Question:
R.K. Boats Inc. has just installed a new hydraulic lift system which is being categorized as a 5-year class-life asset under MACRS. The total purchase cost plus installation amounted to $750,000. RKB has always used straight-line depreciation in the past, but their accountant is pushing the owner to use the MACRS rates this time around. The owner seems to think that it really doesn’t matter since the total depreciation under each method will still sum up to $750,000 and be spread over 6 years with the application of the “half-year” convention. Do you agree with the owner? Please explain by making the appropriate calculations. RKB’s hurdle rate is 10% and its marginal tax rate is 30%.
Fantastic news! We've Found the answer you've been seeking!
As an online tutor with over seven years of experience and a PhD in Education, I have had the opportunity to work with a wide range of students from diverse backgrounds. My experience in education has allowed me to develop a deep understanding of how students learn and the various approaches that can be used to facilitate their learning. I believe in creating a positive and inclusive learning environment that encourages students to ask questions and engage with the material. I work closely with my students to understand their individual learning styles, strengths, and challenges to tailor my approach accordingly. I also place a strong emphasis on building strong relationships with my students, which fosters trust and creates a supportive learning environment. Overall, my goal as an online tutor is to help students achieve their academic goals and develop a lifelong love of learning. I believe that education is a transformative experience that has the power to change lives, and I am committed to helping my students realize their full potential.