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MACRS (Modified Accelerated Cost Recovery System) Percentage by recovery year Recovery year 3 years 5 years 7 years 1 33% 20% 14% 2 45% 32%

MACRS (Modified Accelerated Cost Recovery System)

Percentage by recovery year

Recovery year

3 years

5 years

7 years

1

33%

20%

14%

2

45%

32%

25%

3

15%

19%

18%

4

7%

12%

12%

5

12%

9%

6

5%

9%

7

9%

8

4%

Under MACRS, an asset which originally cost $10,000 is being depreciated using a 5-year recovery period. What is the depreciation expense in year 2?

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