answer all parts

Depreciation Choices and Outcome.
Mulligan Co. purchased a new machine on January 1. The following information pertains to the purchase:

Life of asset	5 years
Salvage value	$7,500
Purchase price	45,000
Sales tax	2,500
Freight cost	2,000
Electrical set-up	1,750
Custom programming	1,250
Estimated annual labor savings	8,750
Additional revenue generated	20,000

a. Determine the capitalized cost of the new machine
$Answer

b. Compute annual depreciation, accumulated depreciation and the machine's book value for the first three year assuming:
i. Straight-line depreciation
ii. Double-declining-balance method

Straight-Line Depreciation				Double-Declining Balance
	Depreciation Expense	Accumulated Depreciation	Book Value at Year-end		Depreciation Expense	Accumulated Depreciation	Book Value at Year-End
Year 1
Year 2
Year 3

c. Assume the machine is sold for $20,000 at the end of the third year after depreciation has been calculated.
Determine the gain or loss assuming:
i. Straight-line depreciation
ii. Double-declining balance method

Do not use negative signs with your answers below.

		Amount	Gain or Loss
Straight-line			gainloss
Double-declining			gainloss

d. Given your answer in part c, if Mulligan was able to perfectly predict the future that the machine would be sold for $20,000 at the end of the third year, which depreciation method should Mulligan choose?
Ignore taxes.

Mulligan's overall cash flow results would be greater if the straight-line method is used.

Mulligan's overall cash flow results would be greater if the double-declining method is used.

Mulligan's overall cash flow results would be the same with either depreciation methods.