7-12. A bowling alley costs $500,000 and has an estimated life of 10 years (SV10 = $20,000).

a. Determine the depreciation for years one through 10 using: (i) the straight-line method; (ii) the 200% declining balance method; and (iii) the MACRS method (ADR guideline period = 10 years). A table containing some of the depreciation values is provided below. Please complete the table. (7.3, 7.4) EOY Straight-Line Method Declining Balance Method MACRS Method 1 $100,000 $71,450 2 $80,000 3 4 5 6 $32,768 $44,600 7 $26,214 $44,650 8 9 10 $48,000

b. Compute the present worth of depreciation at EOY zero for each of the three depreciation methods. The MARR is 10% per year.

c. If a large present worth in Part

(b) is desirable, what do you conclude regarding which method is most desirable?