# Exam3Sol(2) - Version B1/Version A4 Compute the...

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Version B-1/Version A-4 Compute the depreciation expense that would be taken using classical or pre-1981  methods, without the half-year convention, for each of the years shown, and enter the  values in the table.  The asset is kept for the number of years shown.  You may round to the  nearest dollar .  [Do not enter book values in the table.] Purchase cost 350,000 Estimated salvage value at end  of depreciation life 100,000 Depreciation life or property class 8 Number of years the asset is  kept 10 150%DB, yr. 1 150%DB, yr.  2 150%DB, yr. 8 SL, yr. 1 SL, yr. 2 SL, yr. 8 65625 53320.31 0 31250 31250 31250

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A company obtained a loan to help finance the small production line.  The amount borrowed  was 200,000.  The annual loan interest is 10%.  The company is interested in paying back  the loan in 10 years using  equal total payments  (the total of principal and interest is the  same each year).   Prepare  the loan repayment schedule. (i) Annual Payment = 200,000(A/P, 10%, 10) = 200,000*0.16275 = 32,550 Time Principal  payment Interest  payment Total payment New loan balance 1 12,550 20,000 32,550 187,450 2 13,805 18,745 32,550 173,645 3 15,185.5 17,364.5 32,550 158,459.5 4 16,704.1 15,846.0 32,550 141,755.5 5 18,374.5 14,175.5 32,550 123,381.0 6 20,211.9
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## This note was uploaded on 05/10/2010 for the course ISYE 3025 taught by Professor Lee during the Fall '09 term at Georgia Institute of Technology.

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Exam3Sol(2) - Version B1/Version A4 Compute the...

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