In January 2010, Salem Corporation, purchased $350,000 of new MACRS 5-year property in the US. This equipment was placed in service May 1, 2010. Salem wants to take as much depreciation in 2010 as pos

In January 2010, Salem Corporation, purchased $350,000 of new MACRS 5-year property in the US. This equipment was placed in service May 1, 2010. Salem wants to take as much depreciation in 2010 as possible. Calculate the depreciation for 2010. 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 Salem would not choose to take as much depreciation as possible.

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In January 2010, Salem Corporation, purchased $350,000 of new MACRS 5-year property in the
US. This equipment was placed in service May 1, 2010. Salem wants to take as much
depreciation in 2010 as possible. Calculate the depreciation for 2010. 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 Salem would not
choose to take as much depreciation as possible.

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