Calculating book value of an asset

Business & Finance
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Genetic Insights Co. purchases an asset for $18,972. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $4,425.

Calculate book value of an asset. Round the answer to two decimals.

Oct 3rd, 2015

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Percent Discount
Year 0  $ 18,972.00
Year 1  $ 18,972.00 14.29%  $  2,711.10
Year 2  $ 18,972.00 24.49%  $  4,646.24
Year 3  $ 18,972.00 17.49%  $  3,318.20
Year 4  $ 18,972.00 12.49%  $  2,369.60
Year 5  $ 18,972.00 8.93%  $  1,694.20
Year 6  $ 18,972.00 8.93%  $  1,694.20
Purchase Price  $ 18,972.00
Total Depreaciation  $ 16,433.55 
Book Value  $  2,538.45
The total book value of the Asset in Year 6 is $  2,538.45. Book Value is Equal to Value of an Asset less its depreciation.

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Oct 3rd, 2015

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