Option 2
Year 2 depreciation rate MACRS-7 year = 24%
Depreciation on new machine = 750000*24%=180000
Year 4 depreciation rate MACRS 5 year= 11.5%
Depreciation on old machine= 500000*11.5%= 57500
Difference= 122500
New Machine will cost $750,000, and will be depreciated using 7-year MACRS. Old Machine is 2...
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