In: Finance
Will Do, Inc. just purchased some equipment at a cost of
$650,000. What is the proper methodology for computing the
depreciation expense for year 3 if the equipment is classified as
5-year property for MACRS?
MACRS 5-year property
Year Rate
1 20.00%
2 32.00%
3 19.20%
4 11.52%
5 11.52%
6 5.76%
Depreciation expense for year 3=Cost*Depreciation rate for year 3
=650,000*19.2%
which is equal to
=$124800