A land grant university has upgraded its Course Management System (CMS), integrating the system throughout all of its main campus and branch campuses around the state. It has purchased a set of 15 servers and peripherals for needs associated with the CMS. The total cost basis is $120,000 and expected use will be 5 years, after which it will have no projected value. Calculate the depreciation deduction and book value for each year.

A)Use straight-line depreciation.

B)Use declining balance depreciation with a rate that ensures the book value equals the salvage value.

C) Use double declining balance depreciation.

D)Use double declining balance switching to straight-line depreciation.

Note: Please explain with depreciation rate calculation. How you are arriving at 60% for declining balance and 40% for DDB.