Question

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?

Answer 1

Answer:

$28,800

Explanation:

Data provided in the question:

The asset is depreciable under the 5 year MACRS category

Depreciation percentages for all six years are:

0.20, 0.32, 0.192, 0.115, 0.115, 0.058

Worth of the asset = $150,000

Now,

Depreciation to be claimed in the year 3 will be

= Worth of the asset × Depreciation percentages for the year 3

here, from the given percentages of the depreciation

the Depreciation percentages for the year 3 is 0.192

= $150,000 × 0.192

= $28,800