MiniMe7

When I tried this question I initially got it wrong because when they say “for tax purposes depreciation is accelerated to 35% in years 1 and 2, and 30% in year 3. For purposes of this exercise ignore all expenses other than depreciation.” I took that to mean the percentage of remaining book value in that year.
However, it meant percentage of initial book value… I’m going to assume that if a question similar to this pops up on the actual exam they would be more explicit with the depreciation treatment.