Intro Southwest Airlines just bought a new jet for $39,000,000. The jet falls into the 7-year...

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Intro Southwest Airlines just bought a new jet for $39,000,000. The jet falls into the 7-year...

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Southwest Airlines just bought a new jet for $39,000,000. The jet falls into the 7-year MACRS category, with the following depreciation rates (half-year convention):

Year	1	2	3	4	5	6	7	8
Depr. rate	14.29%	24.49%	17.49%	12.49%	8.93%	8.92%	8.93%	4.46%

Part 1

What was the depreciation in year 5?

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Answer 1

Answer #1

Calculation of annual depreciation

	Cost	Dep Rate	Depreciation

Year-1	$ 39,000,000	14.29%	$ 5,573,100
Year-2	$ 39,000,000	24.49%	$ 9,551,100
Year-3	$ 39,000,000	17.49%	$ 6,821,100
Year-4	$ 39,000,000	12.49%	$ 4,871,100
Year-5	$ 39,000,000	8.93%	$ 3,482,700
Year-6	$ 39,000,000	8.92%	$ 3,478,800
Year-7	$ 39,000,000	8.93%	$ 3,482,700
Year-8	$ 39,000,000	4.46%	$ 1,739,400

So year 5 depreciation will be $ 3,482,700

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Answer 2

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Intro Southwest Airlines just bought a new jet for $39,000,000. The jet falls into the 7-year...

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