Sarah Jarala recently purchased an asset that she intends to use for business purposes in her small Iceland Tourism business. The asset has MACRS class life of 5 years. Sarah purchased the asset for $85,000 and uses a salvage value for tax purposes of $15,000 (when applicable). Also, the ADR life of the asset is 8 years. Please answer the following questions for Sarah.
(a) Using MACRS depreciation, what is the book value after 4 years ?
(b) Using MACRS depreciation, what is the depreciation for the 6th year ?
(c) Using MACRS depreciation, what is the book value after 8 years ?
(d) Using MACRS depreciation, what is the book value after 2 years ?
(e) Using MACRS depreciation, what is the sum of the depreciation charges through the 5th year ?
(f) Using straight-line depreciation (with no halfyear convention), what is the book value after the 3rd year?
(g) Using straight-line depreciation (with no halfyear convention), what is the book value after the 8th year?