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26 November, 12:23

You invest in a project that has a depreciable asset. The asset is depreciable under the 5year MACRS category. The depreciation percentages for all six years are: 0.20, 0.32, 0.192, 0.115, 0.115, 0.058. On an asset worth $150,000. How much depreciation do you get to claim in year 3? a. $14, 375 b. $30,000 c. $28, 800 d. $7, 250

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  1. 26 November, 12:33
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    c.$28,800

    Explanation:

    Depreciation of the asset is calculated using the following formula:

    Depreciation=Cost of Asset*Depreciation percentage for specific year

    Keeping in mind the above formula, depreciation can be calculated as follow:

    Cost of Asset=$150,000

    Depreciation for year 1=150,000*0.20=$30,000

    Depreciation for year 2=150,000*0.32=$48,000

    Depreciation for year 3=150,000*0.192=$28,800

    Therefore, the answer is c.$28,800
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Home » Business » You invest in a project that has a depreciable asset. The asset is depreciable under the 5year MACRS category. The depreciation percentages for all six years are: 0.20, 0.32, 0.192, 0.115, 0.115, 0.058. On an asset worth $150,000.
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