Your company has just purchased a new piece of production equipment for $123,500. This equipment has an 18 year useful life, but is classified as a 10 year MACRS asset. The equipment has a $53,400 salvage value at the end of its useful life. Determine the amount of depreciation in year 8, using the double declining balance (DDB) method.
Consider this same piece of production equipment that was purchased for $123,500. This equipment has an 18 year useful life, but is classified as a 10 year MACRS asset. If the equipment is sold for $53,400 in year 8, what are the net proceeds of this sale? Assume that the company has a marginal tax rate of 27%.