Rosario Inc. just purchased some equipment at a cost of $650,000. What is the proper method for computing the depreciation expense for year 4 if the equipment is classified as 5-year property for MACRS?

The MACRS schedule has the following depreciation rates for a 5-year asset: (year 1 to 6) 20%, 32%, 19.2%, 11.52%, 11.52%, and 5.76% respectively.

Group of answer choices

$650,000 * .1152

$650,000 * (1-.20) *(1-.32) * (1-.192)

$650,000 * (1-.1152)

$650,000 * (1-.20) * (1-.32) *(1-.192)*.1152

$650,000 * (1-.20) *(1-.32)*(1-.192)

iv) Winning the three lawsuits, but incurring defense costs of $250,000?