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1. To determine the MACRS rates in Table 12.2, the switching procedure in Section 12.6 must be altered slightly to accommodate the half-year convention imposed by MACRS. The first difference is in year 1, where the DDB rate is only one-half of the DDB rate. The second difference is in the denominator for the SL depreciation. The term is (n - t + 1.5), instead of the (n - t+1) shown in Equation [12.15), DSL = . The third and final change is that one-half of the SL depreciation allowed in year n (year 5) is taken in the year n +1. Use the switching procedure and three changes above to verify the MACRS rates for n = 5. Calculate the depreciation rate in each year for each method, DDB and SL, as needed. In what year does the switch from DDB to SL take place? MACRS Depreciation Rate (%) for n=5 20.00 32.00 19.20 11.52 11.52 Year 6 5 .76 1. To determine the MACRS rates in Table 12.2, the switching procedure in Section 12.6 must be altered slightly to accommodate the half-year convention imposed by MACRS. The first difference is in year 1, where the DDB rate is only one-half of the DDB rate. The second difference is in the denominator for the SL depreciation. The term is (n - t + 1.5), instead of the (n - t+1) shown in Equation [12.15), DSL = . The third and final change is that one-half of the SL depreciation allowed in year n (year 5) is taken in the year n +1. Use the switching procedure and three changes above to verify the MACRS rates for n = 5. Calculate the depreciation rate in each year for each method, DDB and SL, as needed. In what year does the switch from DDB to SL take place? MACRS Depreciation Rate (%) for n=5 20.00 32.00 19.20 11.52 11.52 Year 6 5 .76

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