What is the depreciation amount in year two for the following example using MACR

Question

What is the depreciation amount in year two for the following example using MACRS
A new machine is purchased for 1,500,000 it cost 450,000 to deliver and set it up ready for use it will be depreciated over 10 years with a salvage value of 100,000

What is the depreciation amount in year two for the following example using MACRS A new machine is purchased for 1,500,000 it cost 450,000 to deliver and set it up ready for use it will be depreciated over 10 years with a salvage value of 100,000 O 127,725 164,432 O 173,940 351,000

Explanation / Answer

Depreciation for year 2:

= Asset cost×MACRS rate for 2nd year

= ($1,500,000+$450,000)×18%

= $1,950,000×18%

= $351,000

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