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24. A company which uses the MACRS system of depreciation: 6-7
Chapter 06 - Making Capital Investment Decisions25. Bet‘r Bilt Toys just purchased some MACRS 5-year property at a cost of $230,000. Which of the following will correctly give you the book value of this equipment at the end of year 2?I. 52% of the asset costII. 48% of the asset costIII. 68% of 80% of the asset costIV. the asset cost, minus 20% of the asset cost, minus 32% of 80% of the asset cost 26. Will Do, Inc. just purchased some equipment at a cost of $650,000. What is the proper methodology for computing the depreciation expense for year 3 if the equipment is classified as 5-year property for MACRS?6-8
Chapter 06 - Making Capital Investment Decisions27. The book value of an asset is primarily used to compute the: 28. The salvage value of an asset creates an after-tax cash inflow to the firm in an amount equal to the: 29. The pre-tax salvage value of an asset is equal to the: 30. A project's operating cash flow will increase when: 6-9