An initial capital investment of a petroleum and natural gas equipment is $750,000. This asset can be disposed for $150,000 at the end of its depreciable life (recovery period). If the two methods of MACRS (GDS) and Double Declining Balance (DDB) are used to depreciate this asset:

1. Calculate the depreciation cost of the asset in years 3, 5 and 6 using both the MACRS and the DDB methods.
2. What is the Book Value of the asset at the end of year 5 using both the methods of MACRS and DDB? Which method provides a smaller BV at the end of year 5?