Question

In: Economics

Determine the MACRS (a) class, (b) annual depreciation deductions in ($) and (c) annual book values...

Determine the MACRS (a) class, (b) annual depreciation deductions in ($) and (c) annual book values in ($) for an aircraft worth $100 million. (15 points) Please show equations that you used in excel! ill rate good

Solutions

Expert Solution

(a) MACRS asset class for Aircrafts (Airplanes) is 00.21 with GDS recovery period of 5 years.

(b) and (c) Depreciation schedule as follows.

Year Cost ($ Million) Depreciation Rate (%) Annual Depreciation ($ Million) Book Value ($ Million)
1 100 20 20 80
2 100 32 32 48
3 100 19.2 19.2 28.8
4 100 11.52 11.52 17.28
5 100 11.52 11.52 5.76
6 100 5.76 5.76 0

Screenshot of formula:


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