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Year 0Year 1Year 2Year 3
MACRS
Depreciation Rate33.33%44.45%14.81%7.41%

A firm is considering the purchase of a new machine for $300,000. The firm is unsure if it should use the 3-Year MACRS schedule or straightline depcreciation over three years. What is the difference in the book value after three years if the firm uses MACRS instead of straightline depreciation?

▸ $66,660

▸ $14,820

▸ $7,410

▸ $0
Textbook 
Fundamentals of Corporate Finance
Edition: 2nd
Authors:
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