In an article on www.edmunds.com called In an article on www.edmunds.com called

Question

In an article on www.edmunds.com called

In an article on www.edmunds.com called

In an article on www.edmunds.com called "Strategies for Smart Car Buying," Philip Reed highlights the need to focus on resale value. After 3 years, some cars are worth 55% of their original value, some only 20%. Edmunds lists the 2008 Mini Cooper Clubman as the car most likely to depreciate the least. Trish Eberhart decided to purchase a Mini Cooper Clubman. She found a 2008 model for $23,920. Use MACRStable. During the first year using MACRS, how much will the car depreciate (assume a 3-year life class)? What is the value of the car after the first year?

Explanation / Answer

depriciation in 1st year = 0.33*23920 = 7893.6

value of car after 1st year = 23920 - 7893.6 = 16026.4

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