IDNLearn.com: Where your questions are met with thoughtful and precise answers. Our experts provide timely and accurate responses to help you navigate any topic or issue with confidence.

Using the MACRS rates from the table, what is the book value of a [tex][tex]$\$[/tex]2,500[tex]$[/tex] computer after 3 years?

\begin{tabular}{|c|r|}
\hline Year & MACRS Rate \\
\hline 1 & [tex]$[/tex]20.0 \%[tex]$[/tex] \\
\hline 2 & [tex]$[/tex]32.0 \%[tex]$[/tex] \\
\hline 3 & [tex]$[/tex]19.2 \%[tex]$[/tex] \\
\hline 4 & [tex]$[/tex]11.52 \%[tex]$[/tex] \\
\hline 5 & [tex]$[/tex]11.52 \%[tex]$[/tex] \\
\hline 6 & [tex]$[/tex]5.76 \%[tex]$[/tex] \\
\hline
\end{tabular}

Book Value [tex]$[/tex]=\[tex]$ ?$[/tex][/tex]

Round to the nearest cent.


Sagot :

To determine the book value of a [tex]$\$[/tex]2500[tex]$ computer after 3 years using the MACRS rates provided, we'll follow these steps: 1. Identify the MACRS rates for each of the first three years: - Year 1: \(20.0\% = 0.20\) - Year 2: \(32.0\% = 0.32\) - Year 3: \(19.2\% = 0.192\) 2. Calculate the depreciation for each of the three years: - Depreciation for Year 1: \[ \text{Depreciation Year 1} = \$[/tex]2500 \times 0.20 = \[tex]$500.00 \] - Depreciation for Year 2: \[ \text{Depreciation Year 2} = \$[/tex]2500 \times 0.32 = \[tex]$800.00 \] - Depreciation for Year 3: \[ \text{Depreciation Year 3} = \$[/tex]2500 \times 0.192 = \[tex]$480.00 \] 3. Calculate the accumulated depreciation over the first three years: \[ \text{Accumulated Depreciation} = \$[/tex]500.00 + \[tex]$800.00 + \$[/tex]480.00 = \[tex]$1780.00 \] 4. Determine the book value after 3 years: \[ \text{Book Value} = \$[/tex]2500 - \[tex]$1780.00 = \$[/tex]720.00
\]

Therefore, the book value of the computer after 3 years is [tex]\(\$720.00\)[/tex].