3 year 1 2 3 4 Aglobal positioning system (GPS) receiver is purchased for $3,500. The IRS informs your company that the useful (class) life of the system is seven years. The expected market (salvage) value is $400 at the end of vear sev a. Use the straight line method to calculate depreciation in year two. b. Use the 200% declining balance method to calculate the cumulative depreciation through year three. GDS Recovery Rates () for the Six Personal Property Classes c. Use the MACRS method to calculate the cumulative depreciation through year four. Recovery Period (and Property Class) d. What is the book value of the GPS receiver at the end of year three when straight line depreciation is used? Year 5-year 7-year? 10-year 15-year 20-year 0.3333 0.2000 0.1429 0.1000 0.0500 0.0375 Click the icon to view the summary of the principal features of GDS under MACRS. 0.4445 0.3200 0.2449 0.1800 0.0950 0.0722 0.1481 0.1920 0.1749 Click the icon to view the GDS Recovery Rates (x) 0.1440 0.0856 0.0668 0.0741 0.1152 0.1249 0.1152 0.0770 0.0618 5 0.1152 0.0893 0.0922 0.0693 0.0571 6 0.0576 0.0892 0.0737 0.0623 0.0528 d 0.0893 0.0655 0.0590 0.0489 a. Using the SL method, the depreciation amount in year two is $(Round to the nearest dollar.) 0.0446 0.0655 0.0590 0.0452 0.0656 0.0591 0.0447 b. Using the 200% DB method, the the cumulative depreciation through year three is $(Round to the nearest dollar.) 0.0655 0.0590 0.0447 0.0328 0.0591 0.0446 12 c. Using the MACRS method, the cumulative depreciation through year four is $. (Round to the nearest dollar.) 0.0590 0.0446 13 0.0591 0.0446 d. The book value of the GPS receiver at the end of year three when straight line depreciation is used is $ (Round to the nearest dollar.) C. 7 8 9 10 11