Better Beverages purchased some fixed assets classified as five-year property for MACRS. The assets cost $108,000. The MACRS rates are. 2,.32,.192,.1152,.1152, and. 0576 for years 1 to 6, respectively. What will the accumulated depreciation be at the end of year 4? a. $101,779.20

b. $25,056.67

c. $42,002.89

d. $48,755.09

e. $89,337.60

e. $89,337.60

Explanation:

Given that

The cost of the asset = $108,000

And, the MACRS rate is. 2,.32,.192,.1152,.1152, and. 0576 for years 1 to 6

So the accumulated depreciation at the end of the year 4 is

= ($108,000) * (0.2 + 0.32 + 0.192 + 0.1152)

= $108,000 * 0.8272

= $89,337.60

By multiplying the cost of the asset with the MACRS rate upto fourth year we can get the accumulated depreciation