A company is evaluating the acquisition of an asset that costs $64,000 and requires $4,000 in installation costs. If the company depreciates the asset under MACRS, using a 5-year payback period  determine the depreciation charge for each year.

PROBLEM 11-15

Year

Depreciation Program Cost

%

Amount

1

$68,000

20%

2

$68,000

32%

3

$68,000

19%

4

$68,000

12%

5

$68,000

12%

6

$68,000

5%