Question
An energy production company has the following information regarding the acquisition of new gas-turbine equipment. Purchase price = $680,000 Transoceanic shipping and delivery cost =
An energy production company has the following information regarding the acquisition of new gas-turbine equipment. Purchase price = $680,000 Transoceanic shipping and delivery cost = $4,300 Installation cost (1 technician at $1,600 per day for 4 days) = $6,400 Tax recovery period = 13 years Book depreciation recovery period = 10 years Salvage value = 11% 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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