Rebel Systems purchased a new mining equipment for its mining activities in Northern Nevada. The table on the right lists the relevant initial costs for this purchase. The service life of the equipment is 4 years and its salvage value for depreciation purposes is expected to be about 24% of the price. Cost Item Price Training Installation Cost $150,000 $16,000 $15,000 a. What is the cost basis of the equipment? b. What are the annual depreciations of the equipment if (i) the SL method is used? (ii) the MACRS-GDS method is used? For this method, remember to get the recovery period from Table 7-2 and depreciation factors from Table 7-3. Remember also the application of the half-year convention. (iii) the 150% DB method is used? (iv) the 200% DB method is used? c. Calculate the book values of the equipment at the end of 3 years using all the methods above. Answers: (a) The cost basis of the equipment is sl (Round to the nearest dollar) (b) Annual depreciations and book values: (Round to the nearest dollar) Year SL MACRS-GDS 150% DB 200% DB $07 $ s Book values at end of 3 years $ $