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A technical sales representative purchases a business vehicle which costs $38,000. This is classified in the 5-year property class using MACRS-GDS; however, the sales representative

A technical sales representative purchases a business vehicle which costs $38,000. This is classified in the 5-year property class using MACRS-GDS; however, the sales representative only plans to keep the car for 3 years, at which point she will sell the car for $20,000. What would be the depreciation allowance and book value at the end of years 1 and 3 using MACRS?

PW = ?

IRR = ?

Should the automotive company purchase the new fixture?

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