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Arko oil company purchased two large compressors for $125,000 each. One compressor was installed in the firms Texas refinery and is being depreciated by DDB
Arko oil company purchased two large compressors for $125,000 each. One compressor was installed in the firms Texas refinery and is being depreciated by DDB depreciation. The other compressor was placed in the Oklahoma refinery, where it is being depreciated by SLN depreciation with zero salvage value. Assume the company pays federal income taxes each year and the tax rate is constant. Assume the life span of the equipment is 5 years. Which corporation will wind up paying more income taxes in the third year of operation?
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