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Intro Southwest Airlines just bought a new jet for $39,000,000. The jet falls into the 7-year MACRS category, with the following depreciation rates (half-year convention):
Intro
Southwest Airlines just bought a new jet for $39,000,000. The jet falls into the 7-year MACRS category, with the following depreciation rates (half-year convention):
Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Depr. rate | 14.29% | 24.49% | 17.49% | 12.49% | 8.93% | 8.92% | 8.93% | 4.46% |
Part 1
What was the depreciation in year 5?
Depreciation = Initial book value * Depreciation rate = 39,000,000 * 0.0893 = 3,482,700 Correct
Part 2
What is the book value at the end of year 5?
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