Trenton Fabrication Company purchased industrial tools costing $70,000, which fall in the 3-year property class under MACRS.

Use Appendix A and Exhibit 16-9 for your reference. (Use appropriate factor(s) from the tables provided.). (Round your final answers to the nearest dollar amount.)

Required:

1.	Prepare a schedule of depreciation deductions assuming:

a.

The firm uses the accelerated depreciation schedule specified by MACRS

year	accelerated depreciation
1
2
3
4

b.

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

year	straight-line depreciation
1
2
3
4

2.

Calculate the present value of the depreciation tax shield under each depreciation method listed in part (1). Trenton Fabrication Companys after-tax hurdle rate is 10 percent, and the firms tax rate is 30 percent.

	Present value of depreciation tax shield
under MACRS Accelerated depreciated
under MACRS Straight-line dpereciation