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The XYZ Block Company purchased a new ofce computer and other depreciable computer hardware for $4,800. During the third year, the computer is declared obsolete

The XYZ Block Company purchased a new office computer and other depreciable computer hardware for $4,800. During the third year, the computer is declared obsolete and is donated to the local community college. Using an interest rate of 15%, calculate the PW of the depreciation deductions using each of the following methods. Assume that no salvage value was initially declared and that the machine was expected to last five years.

(a) Straight-line depreciation
(b) Sum-of-the-years’-digits depreciation
(c) MACRS depreciation
(d) Double declining balance depreciation

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a Depreciation deduction per year Cost Useful life 4800 5 960 Present worth of depreciation 960 x Pr... blur-text-image

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