Session 8 ch09 class.ppt

# S for income tax purposes two forms of macrs general

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for use in the U.S. for income tax purposes Two forms of MACRS General Depreciation System (GDS) MACRS-GDS uses 200% and 150% DB switching to SLN depreciation Alternative Depreciation System (ADS) MACRS-ADS uses SLN depreciation (Unless stated otherwise, when we refer to MACRS, we are referring to MACRS-GDS)

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Principles of Engineering Economic Analysis , 5th edition Sum of Years’ Digits (SYD) Depreciation Let P = cost basis F = salvage value n = recovery period d t = depreciation allowance for year t B t = book value at the end of year t d t = 2( n t + 1)( P F )/[ n ( n + 1)] =SYD(cost,salvage,life,per) B t = F + ( P F )( n t )( n t + 1)/[ n ( n + 1)]
Principles of Engineering Economic Analysis , 5th edition Example 9.A.1 (home work) Calculate the SYD depreciation allowances and book values for the \$500,000 surface mount placement machine, including a useful life of 10 years and a salvage value of \$50,000.

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Principles of Engineering Economic Analysis , 5th edition Example 9.A.1 (home work) Calculate the SYD depreciation allowances and book values for the \$500,000 surface mount placement machine, including a useful life of 10 years and a salvage value of \$50,000.
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• Fall '17
• Mike Heny

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