Sharpe Machining Company purchased industrial tools costing $$80,000,$ which fall in the $3-$year property class under MACRS.

Use Appendix A and Exhibit $16-9$ for your reference.

Note:Use appropriate factor$($s$)$ from the tables provided.

Required:

Prepare a schedule of depreciation deductions assuming:

a$.$ The firm uses the accelerated depreciation schedule specified by MACRS.

b$.$ The firm uses the optional straight$-$line depreciation method and the half$-$year convention.

Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement $1.$ Sharpe

Machining Company's after$-$tax hurdle rate is $14$ percent, and the firm's tax rate is $30$ percent.