HW8.Solution

Solution theres an early disposal of the cells so

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Unformatted text preview: disposal of the cells, so half-year convention applies to the depreciation in year six. The recovery rate of year six becomes 0.0892/2 = 0.0446. So the sum of recovery rates for year 1 to 6 becomes (0.1429+0.2449+0.1749+0.1249+0.0893+0.0446 = 0.8215) So ( )( The depreciation recaptured is 5|Page ) NAME (Printed): _________________,________________ (Last) (First) IE 343 –HW #8 Due: Nov. 1, 2013 Problem 6 According to Table 7-4 in our text book, 5 – year MACRS GDS recovery rates are calculated by 5-year, 200% DB with switchover to SL under half year convention. Derive the rates. Solution: EOY 0 1 2 3 4 5 6 0.2000 0.3200 0.1920 0.1152 0.0691 0.0230 or 0.0115 0.1000 0.1778 0.1371 0.1152 0.1152 0.0576 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 BV 1 0.8000 0.4800 0.2880 0.1728 0.0576 0 Either one is fine. It’s already switched to SL method, which makes this number meaningless. 6|Page...
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