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On 1st of January 2019, a corporation buys some large machinery to produce shampoo which costs $120,000. It's useful life is 6 years and salvage value is $5,000. Their year ends on 31 December.
Required:
Question a. Calculate the depreciation expense for 2019 using straight-line method for depreciation.
Question b. Calculate the depreciation expense for 2019 using the declining method of depreciation with a 25% rate.
Question c. Bulgarian corporate tax rate is 10% Norway's corporate tax rate is 23% Do Norway corporations have a higher incentive to choose a declining method of depreciation? Whatever you answer is, why? (no calculations are necessary to answer c.)
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