ARKO oil company purchased two largecompressors for
Chapter , Problem 12-12(choose chapter or problem)
ARKO oil company purchased two largecompressors for $125,000 each. One compres-sor was installed in the firms Texas refinery andis being depreciated by MACRS depreciation.The other compressor was placed in the Okla-homa refinery, where it is being depreciated bysum-of-years- digits depreciation with zero salvagevalue. Assume the company pays federal incometaxes each year and the tax rate is constant. Thecorporate accounting department noted that the twocompressors are being depreciated differently andwonders whether the corporation will wind up pay-ing more income taxesover the life ofthe equipmentas a result of this. What do you tell them?
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