Question

An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax purposes. The asset has an acquisition cost of \( \$ 8,800,000 \) and wili be sold for \( \$ 2,260,000

Answer 1

This question is about MACRS depreciation for tax purposes in a business project.

Step-by-step explanation:

The subject of this question falls under Business and is at the College level.

MACRS (Modified Accelerated Cost Recovery System) is a depreciation method used for tax purposes. It allows businesses to recover the costs of their assets over a predetermined period of time. In this case, the asset falls under the five-year MACRS class.

The acquisition cost of the asset is $8,800,000 and it will be sold for $2,260,000. The MACRS depreciation schedule will determine the annual depreciation expense for each year of the four-year project.