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Sharpe Machining Company purchased industrial tools costing $80,000, which fall in the 3-year property class...

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Accounting

Sharpe Machining Company purchased industrial tools costing $80,000, which fall in the 3-year property class under MACRS.
Use Appendix A and Exhibit 16-9 for your reference.
Note:Use appropriate factor(s) from the tables provided.
Required:
Prepare a schedule of depreciation deductions assuming:
a. The firm uses the accelerated depreciation schedule specified by MACRS.
b. The firm uses the optional straight-line depreciation method and the half-year convention.
Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe
Machining Company's after-tax hurdle rate is 14 percent, and the firm's tax rate is 30 percent.
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