ACCT618 CTU Financial and Operational Effects Discussion

1000 -1200 Word document and also calculation Created in Excel

In January 20XX, JIM, purchased $350,000 of new MACRS (Modified Accelerated Cost Recovery System) 5-year property in the United States. This equipment was placed in service May 1, 20X. JIM wants to take as much depreciation in 20XX as possible.

  • Calculate the depreciation for 20XX.
  • If JIM had been located in a qualified enterprise zone, what would be the depreciation amount?
  • Explain the depreciation method you used.

In addition, include the tax benefits (savings) for the first year and the present value of the total tax benefits for the entire 5-year period.

  • Discuss how the tax benefits and present value would change if a different method of depreciation was used.
  • Also, discuss when JIM would not choose to take as much depreciation as possible.

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