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Jackie purchases equipment during the current year for $800,000 that has a seven-year MACRS recovery period. She expects to sell the property after three years.

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Jackie purchases equipment during the current year for $800,000 that has a seven-year MACRS recovery period. She expects to sell the property after three years. Jackie anticipates that her marginal tax rate in the year of sale will be significantly higher than her current marginal tax rate. Why might it be advantageous for her to use the straight-line method of depreciation? O A. If the straight-line method is used the amount of the gain will be larger than if an accelerated method is used. It may be advantageous for Jackie to have larger deductions in years one and two with a larger gain in year three than to have smaller deductions in years one and two, when her tax rate is lower, with a smaller gain in year three, when her tax rate is higher. OB. The straight-line method will produce greater depreciation deductions than if an accelerated method is used. This will result in a smaller gain when the equipment is sold in year three. This is advantageous because her marginal tax rate is higher in the year of sale. OC. The straight-line method will produce smaller depreciation deductions for the first three years of the equipment's life. This will result in a larger gain when the equipment is sold in year three. This is advantageous because her marginal tax rate is lower in the first two years. OD. If the straight-line method is used the amount of the gain will be smaller than if an accelerated method is used. It may be advantageous for Jackie to have smaller deductions in years one and two with a smaller gain in year three than to have higher deductions in years one and two, when her tax rate is lower, with a higher gain in year three, when her tax rate is higher

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