Question

Find the book value of an asset that has an installed cost of $150,000, a recovery period of 5 years and an elapsed time since purchase of 3 years.
Select one:
a. $43,000
b. $116,000
c. $87,000
d. $58,000

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Abdul-Rahim Taysir

Answer 1

MACRS 5 Yr recovery depreciation
Table and yearly depreciation is given below
Asset Purchase value =$150,000
Year	Depreciation Rate	Annual Depreciation $= $150,000*Depreciation Rate of the year	Book Value of Asset at Year End
0		-	$       150,000
1	20.00%	30,000	$       120,000
2	32.00%	48,000	$         72,000
3	19.20%	28,800	$         43,200
4	11.52%	17,280	$         25,920
5	11.52%	17,280	$           8,640
6	5.76%	8,640	$                  -
	100.00%
So The book value of the asset at the end of Year 3 is =$43,200
Option a is the closest to the value , so option a. is correct.