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4. The Staple Supply Co. has just purchased a new computerized information system with an installed cost of $150,000. The computer is treated as five-year
4. The Staple Supply Co. has just purchased a new computerized information system with an installed cost of $150,000. The computer is treated as five-year property. What are the yearly depreciation allowances? Based on historical experience, we think that the system will be worth only $9,000 when Staple gets rid of it in four years. What are the tax consequences of the sale? What is the total aftertax cash flow from the sale? MACRS Percentage Depreciation Ending Book Value Year 1 2 3 4 5 6 4. The Staple Supply Co. has just purchased a new computerized information system with an installed cost of $150,000. The computer is treated as five-year property. What are the yearly depreciation allowances? Based on historical experience, we think that the system will be worth only $9,000 when Staple gets rid of it in four years. What are the tax consequences of the sale? What is the total aftertax cash flow from the sale? MACRS Percentage Depreciation Ending Book Value Year 1 2 3 4 5 6
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