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ABC Firm has purchased a new machine in January 2 0 2 4 . The information given below: Price of Machine $ 1 . 4

ABC Firm has purchased a new machine in January 2024. The information given below:
Price of Machine $1.44.000
Operating Expense $150.000
Shipping/Installation Expenses$60.000
Insurance Expense $100.000
Depreciable Life of Machine 5 years
tax rate 20%
a) Compute the depreciation charges of the asset according to the MACRS 5-year property
class/6 recovery years. (based on Straight Line Method for 1st,2nd,5th,6th recovery years
and Double Declining Balance Method for 3rd and 4th recovery years)(25p)
b) Compute the tax advantage amount if the Firm will sell the machine two recovery years later. Selling price is $900.000.(10p

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