A video recording system was purchased 3 years ago at a cost of 30,000 with an estimated 5 year recovery period or useful life, and no salvage value.

4. A video recording system was purchased 3 years ago at a cost of $30,000 with an estimated 5-year recovery period or useful life, and no salvage value. There are three commonly-used depreciation methods: straight line (SL), declining balance (DB)/ double declining balance (DDB), and Modified accelerated cost recovery system (MACRS). a. In present time (year 3 only), which depreciation method gives the largest depreciation charge (Ds)? b. In year 2 only, which depreciation method gives the smallest Book Value (BV2)? c. Compare BV at year 5 (BVs) between SL, DDB, and MACRS. Explain the reason for the difference, if any d. If the video recording system is taxable, which depreciation method should be used in year 4? t Line Double Declining Balance MACRS dMACRS Year BV BV 0 30,000 30,000 30,000 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% now 4