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Need help on the incorrect answers. Depreciation and Rate of Return Burrell Company purchased a machine for $46,000 on January 2, 2019. The machine has
Need help on the incorrect answers.
Depreciation and Rate of Return Burrell Company purchased a machine for $46,000 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 $23,000 each year. The tax rate is 35%. 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 21.7 % 2020 27.9 % 2021 39 % 2022 65 % 2023 195 % Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number. 2019 8.13 % 2020 35.21 % 2021 80.5 X % 2022 155.58 % 2023 280.98 X %Step by Step Solution
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