Final answer:
MARCS uses predetermined fixed rates for accelerated depreciation, not the straight-line method, along with the modified half-year convention, which is why the statement is false.
Step-by-step explanation:
The statement that MARCS depreciation rates are based on the straight-line method using the modified half-year convention is false. MARCS, or Modified Accelerated Cost Recovery System, is a method of depreciation used for tax purposes in the United States that allows for the accelerated depreciation of assets. It employs a system of percentage tables to calculate depreciation over an asset's recovery period. The modified half-year convention is applied under MARCS, which assumes that all assets are placed in service or disposed of at the midpoint of the tax year, regardless of when the actual event occurred. This allows for a half-year's worth of depreciation in the first and last years of the asset's recovery period. However, the actual depreciation rates under MARCS are not based on the straight-line method but on predetermined fixed rates that enable faster recovery of the asset cost.