Answer:
The correct answer for year 1 is $366,630, for year 2 is $488,950, for year 3 is $162,910, and for year 4 is $81,510.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the annual depreciation by using following formula:
Annual depreciation = Total cost × MACRS rate
Where, total cost = $1,000,000 + $100,000 = $1,100,000
By putting the value, we get
Annual Depreciation year 1
= $1,100,000 × 33.33%
= $366,630
Annual Depreciation year 2
= $1,100,000 × 44.45%
= $488,950
Annual Depreciation year 3
= $1,100,000 × 14.81%
= $162,910
Annual Depreciation year 4
= $1,100,000 × 7.41%
= $81,510
