using the macrs rates from the following table, what is the book value of a $4,000 computer after 5 years…

using the macrs rates from the following table, what is the book value of a $4,000 computer after 5 years? year macrs rate 1 20.0% 2 32.0% 3 19.2% 4 11.52% 5 11.52% 6 5.76% book value = $? round to the nearest cent.

using the macrs rates from the following table, what is the book value of a $4,000 computer after 5 years? year macrs rate 1 20.0% 2 32.0% 3 19.2% 4 11.52% 5 11.52% 6 5.76% book value = $? round to the nearest cent.

Answer

Explanation:

Step1: Calculate accumulated depreciation rate

First, sum up the MACRS rates for the first 5 years. $20.0%+32.0% + 19.2%+11.52%+11.52%=94.24%$

Step2: Calculate book - value

The book - value formula is $BV = Cost\times(1 - \text{Accumulated Depreciation Rate})$. Here, the cost of the computer is $C = 4000$ and the accumulated depreciation rate $r=0.9424$. $BV=4000\times(1 - 0.9424)$ $BV = 4000\times0.0576$ $BV = 230.40$

Answer:

$230.40$