considers 8% to be an appropriate time value of money. Which would you recommend

Question

considers 8% to be an appropriate time value of money. Which would you recommend? How much better is the present worth for the recommended choice For the data in Problem 11-21, if money is worth 10%, which one of the following three methods of depreciation would be preferable Straight-line method Double declining balance method MACRS method TELCO Corp. has leased some industrial land near its plant. It is building a small warehouse on the site at a cost of $250,000. The building will be ready for use January l The lease will

Explanation / Answer

Preferred depreciation method would be MACRS which stands for modified accelerated cost recovery system. It is the current system allowed in the United States to calculate tax deductions on account of depreciation for depreciable assets (other than intangible assets). It allows a larger deduction in early years and lower deductions in later years when compared to the straight-line method.

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