70.2K

Verified Solution

Link Copied!

Take AAA = 0 ; BBB= 35225 ; CCC = 35225

Equipment for manufacturing vegetable oil products is purchased from Alfa. Items such as oil expellers, filter presses, and a steam generator are purchased for $1.2 million. These devices are expected to be used for 11 years with no salvage value at that time. Compare MACRS to traditional depreciation methods by calculating yearly depreciation allowances, present worth of the depreciation allowances, and book value for each year using each of the following (MARR is (AAA+3) %): a) MACRS-GDS as is proper over its property class depreciation life b) 200 percent DBH with deductions in years 1 through 11 c) DDB taking a full deduction in the first year, with the last deduction in year 10 d) DDB switching to straight line e) SLN taking a full deduction in the first year, with the last deduction in year 10 f) Draw a graph in excel for depreciation values for each method and compare the depreciation methods. Equipment for manufacturing vegetable oil products is purchased from Alfa. Items such as oil expellers, filter presses, and a steam generator are purchased for $1.2 million. These devices are expected to be used for 11 years with no salvage value at that time. Compare MACRS to traditional depreciation methods by calculating yearly depreciation allowances, present worth of the depreciation allowances, and book value for each year using each of the following (MARR is (AAA+3) %): a) MACRS-GDS as is proper over its property class depreciation life b) 200 percent DBH with deductions in years 1 through 11 c) DDB taking a full deduction in the first year, with the last deduction in year 10 d) DDB switching to straight line e) SLN taking a full deduction in the first year, with the last deduction in year 10 f) Draw a graph in excel for depreciation values for each method and compare the depreciation methods

Answer & Explanation Solved by verified expert

See Answer