Ignoring bonus depreciation, the net book value of equipment will:
A) remain constant over the life of the equipment.
B) vary in response to changes in the market value of that equipment.
C) decrease at a constant rate when MACRS depreciation is used.
D) increase over the taxable life of an asset.
E) decrease slower under straight-line depreciation than under MACRS.

Question

Quizplus · Accepted Answer

Under straight-line depreciation, the net book value decreases at a constant rate, which is generally slower than the accelerated depreciation under MACRS, where larger depreciation expenses are recognized in the earlier years.

Ignoring Bonus Depreciation, the Net Book Value of Equipment Will