Question

ABC Company is considering acquiring a new machine that costs $56,000. The machine has a 3-year useful life and a $5,000 salvage value. The tax rate for ABC Company is 20%. What amount of depreciation expense should ABC Company recognize each year?

Answer 1

$13.600

Step-by-step explanation:

Depreciable total value = $56.000 - $ 5.000 = $51.000

Anual depreciable before tax =$
`(51.000)/(3)` = $17.000

Anual depreciable after tax = $17.000 x (1-0.2) = $13.600