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Burrell Company purchased a machine for $16,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero
Burrell Company purchased a machine for $16,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $8,000 each year. The tax rate is 25%. Required: Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset. Straight-line method. If required, round to one decimal place. 2019 37 X % 2020 28.5 X % 2021 33.6 X % 2022 46.3 X % 2023 123.3 X % Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number. 2019 6.5 X % 2020 17.6 X % 2021 40.2 X % 2022 69.7 X % 2023 140.5 X %
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