Morris Motors Just Purchased Some MACRS 5-Year Property at a Cost

question 42

Multiple Choice

Morris Motors just purchased some MACRS 5-year property at a cost of $216,000.Which one of the following will correctly give you the book value of this equipment at the end of year 2?

• A)$216,000/(1 + 0.20 + 0.32)
• B)$216,000 × (1 - 0.20 - 0.32)
• C)$216,000 × (0.20 + 0.32)
• D)[$216,000 × (1 - 0.20)] × (1 - 0.32)
• E)$216,000/[(1 + 0.20)(1 + 0.32)]