Question 1) (15 points) A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant has a cost of $4,000 and a 10-year depreciable life. The estimated salvage value of the saw is $500. Determine the annual depreciation and book value amounts when using the double declining balance with switch to straight-line method (DDB switch to SL). Question 2) (40 points) A machine purchased for $45,000, has a depreciable life of 4 years. It will have an expected salvage value of S5,000 at the end of the depreciable life. a) Using SL method, what is the book value at the end of year 3? b) Using DDB, what is the depreciation amount for year 4? c) Assume that salvage value is 0. Using DDB with switch to SL, what is the book value at the end of year 4. Question 3) (45 points) A piece of construction equipment (asset class 15.0) was purchased by Jones Construction Company. The cost basis is $580,000. a) Determine the GDS depreciation deduction for this property. b) Determine the ADS depreciation deduction for this property. c) If Jones Construction Company can choose between GDS and ADS which one should they use and why? ADS recovery rates are not given in the text book. You can find the proper property class and use the rates from the table below Recovery Year 4 7 10.0020.0020.0020.0020.00 10.00 8.3316.6716.6716.6716.6716.678.33 *The values are given in percentage