An asset for a U.S.-based commercial farm corporation was purchased for $50,000 and has a seven-year useful life and an expected resale value of 20% of the first cost. An abbreviated recovery period of five years is allowed by the modified accelerated cost recovery system (MACRS).

(a) Prepare the MACRS annual depreciation schedule and book values.

(b) Compare these results with double-declining-balance depreciation and book value of n = 7 years that may be determined in another country.