1. A company is purchasing a paver for $345,000. This a 5 year asset with $0 salvage value. Develop the depreciation schedule according to MACRS.

2. Equipment bought at Kal Tech systems at a cost of $200,000 was depreciated using the double declining balance (DDB) method. In year four, the company decided switch to the straight-line depreciation method. Determine the depreciation charges in year4. Assume a depreciable life of 10 years and a salvage value of $20,000.

3. A compute cluster was purchased for $85000 (5 year asset) and it is estimated to have a salvage value of $2,000. Compute the depreciation schedule for each of the 4 methods:

a. Linear

b. SOYD

c. DDB

d. MACRS(Tabulated value)

Which one is more atrtarctive to you as a tax payer, if the market rate is 4.5% per year? Clue: compute the PW of the depereciation values for each alternative and select the one that has the highest present worth it will result in the highest deductions and hence lower taxes)