Why might a manager opt for MACRS or double declining balance as a depreciation method?

Choosing MACRS (Modified Accelerated Cost Recovery System) or the double declining balance method as a depreciation approach is often strategically motivated by the intention to sell the asset before the end of its useful life. These depreciation methods allow for accelerated depreciation, which means that a greater portion of an asset's cost is depreciated in the earlier years of its useful life.

This accelerated expense recognition can provide tax benefits to a business. The manager may want to leverage these benefits to lower taxable income during the period prior to selling the asset. Since the depreciation is higher in the early years, this can help reduce the tax burden and improve cash flow during the asset's first years, making it financially advantageous if the asset is sold before it fully depreciates.

Moreover, this strategy aligns well with businesses that frequently update equipment or technology, thereby not aiming to hold onto an asset for its entire useful life. In this context, the focus on short-term financial benefits before divesting the asset reinforces the selection of these specific methods of depreciation.