A company bought an AGV for its distribution center 5 years ago. The cost of the

Question

A company bought an AGV for its distribution center 5 years ago. The cost of the AGV was $1, 200,000 and its installation cost were $300,000, and the AGV has a 5-year MACRS-GDS property class During the 5th year the company disposes the asset with a salvage value of $150,000. The book value at end of year 4, and the MACRS-table values for years 4, 5 and 6 are shown in the table below. The company tax rate is 40%. The Before tax and loan cash flow for that year is 100,000. The depreciation allowance for year 5 is: $172,800 $86,400 $138,240 $69,120

Explanation / Answer

The depreciation allowance for year 5 is = Bookvalue of the assets - Depreciation Written off upto 4th year

= $259200 - $172800 = $86400 (option b)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.