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Your purchase a PC for $2000 (5 year asset) and you are allowed to write this off as an itemized personal expense from your taxes.
Your purchase a PC for $2000 (5 year asset) and you are allowed to write this off as an itemized personal expense from your taxes. It is estimated to have a salvage value of S0. Compute the depreciation schedule for each of the 4 methods: a. Linear b. SOYD c. DDB (2) d. MACRS (Tabulated values as per tax code) Which depreciation method is better (i.e., which one minimizes the taxes you have to pay, assuming that the market intrest rate is 4.5% per year? Clue: compute the PW of the depereciation values for each alternative and select the one that has the highest present worth. You can use Excel to save time
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