Find the First Year's Depreciation Using the MACRS Method of Depreciation

question 52

Multiple Choice

Find the first year's depreciation using the MACRS method of depreciation and the MACRS depreciation rates table. Round to the nearest dollar.
-Cost: $90,500
Period: 20-year

• A)$6,533
• B)$1,645
• C)$3,394
• D)$9,050

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Definitions:

Compounded Continuously

A calculation involving the natural exponential function for the interest that is added to an amount of money based on an infinitely small rate over a period of time.

Principal

In finance, the original sum of money borrowed in a loan, or put into an investment. In mathematics, it can refer to the principal amount, or initial size of a quantity before interest or growth.

Nearest Cent

Rounding a monetary amount to the closest cent, typically as part of currency calculations to ensure practical transactions.

Decimal Places

The number of digits to the right of a decimal point in a number.