On Pg 43 in section 16.B, there is a question about the effects of depreciation methods on net income.
I was able to do most of the question without any issues. However, I’m stuck on the double declining balance method for year 3 -5. Why does the depreciation expense drop from $132k to $49.3k in year 3 and stick with that for the next two years?
I was under the impression that depreciation in year 3 would be (2 x BV year 2) / Number of years. Wouldn’t this be (2 x 198k) / 5 = $79.2k depreciation in year 3? Is this a mistake in Schweser or am I totally missing something??