Question

A company purchased an asset for $2,900,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project? Hint: Book value = purchase price minus accumulated depreciation.

a. $644,380
b. $214,890
c. $0
d. $1,933,430
e. $2,685,110

Answer 1

b. $214,890

Step-by-step explanation:

book value of the equipment

= Cost - Accumulated Depreciation

= $2,900,000*(1- 0.3333- 0.4445- 0.1481)

= $214,890

Therefore, The book value of the equipment at the end of the project is $214,890.