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What is the net cash saved

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Problem - Cycle Inc. purchased equipment that will help diagnose problems with engines. The equipment cost $200,000 on January 1, 2019 and a residual value of $10,000 was anticipated, with a useful life of 5 years. In 2019, Cycle Inc. has a gross profit of $400,000 and operating expenses of $180,000.

Cycle Inc. has a tax rate of 30%.

Required -

1. Compute the Depreciation Expense for 2019 under both the straight-line and double-declining balance depreciation methods.

2. What is the net cash saved if the accelerated depreciation method is used in 2019?

Reference no: EM132462298

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