MACRS system

CFA Level II
#1

Currently I cannot recall which section the MACRS system is mentioned in details (I guess Equity or CF)

But my question is, lets say we have a 5 years asset’s life, why and how could we know which class the asset would fall into; say 6 year rates ( it will add 1 year). Why is so and what will happen if we have extra year of depreciation?

Thanks

#2

I don’t even understand the question. It’s just a more complex of knowing yearly depreciation than using simple menthods and SL or DD methods. It’s part of capital budgeting portion of corp finance.

#3

I’m not sure if I remember correctly, but 6th year percentage value is residual value.

#4

Thanks!