Depreciation using straight line-double declining balance

Reference no: EM1382237

The CBest construction company bought a new tractor with a purchasing price of $120,000 (including $20,000 tire cost). It has an estimated service life of 5 years and a salvage value of $15,000.

a) Calculate the depreciation using straight-line, double-declining-balance (DBB), and MACRS (current IRS regulation) methods; and tabulate the depreciation schedule.

b) Using the concept of time value, with an estimated MARR of 8%, which method of depreciation is of financially most beneficial?

Reference no: EM1382237

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