Question
An energy production company has the following information regarding the acquisition of new gas-turbine equipment. Purchase price = $780,000 Transoceanic shipping and delivery cost =
An energy production company has the following information regarding the acquisition of new gas-turbine equipment.
Purchase price = $780,000
Transoceanic shipping and delivery cost = $4,300
Installation cost (1 technician at $2,000 per day for 4 days) = $6,400
Tax recovery period = 16 years
Book depreciation recovery period = 8 years
Salvage value = 12% of purchase price
Operating cost (with technician) = $185,000 per year
The manager of the department asked your friend in accounting to enter the appropriate data into the tax-accounting program. What are the values of B, n, and S in depreciating the asset for tax purposes that he should enter?
The value of B is determined to be $ .
The value of S is determined to be $ .
The value of n is determined to be years.
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