The XYZ Block Company purchased a new office computer and

other depreciable computer hardware for $12,000. During the third

year, the computer is declared obsolete and is donated to the local

community college. Using an interest rate of 10%, calculate the PW

of the depreciation deductions. Assume that no salvage value was

initially declared and that the machine was expected to last 5 years.

(a) Straight-line depreciation

(b) Double declining balance depreciation

(c) 100% bonus depreciation

(d) MACRS depreciation

(e) Which method is preferred for determining the firm's taxes?

(f) Which method is preferred for determining the firm's value?

(g) Is using two accounting methods ethical?