ass3 - 1 Carleton University Department of Civil and...

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1 Carleton University Department of Civil and Environmental Engineering ECOR3800B Engineering Economics ASSIGNMENT 3 Due Date: Assignment 3 March 19, 2010, 12:00 Noon Location : Filing cabinet near the entrance to the Civil & Environmental Wing of Mackenzie Engineering Building 1. A machine was purchased by a company four years ago for $8,000. Estimated salvage value is $1000 at the end of its 10 years life. The asset is Class 8 (20% CCA rate -- declining balance class, half year rule applicable). D etermine the asset’s current book value (i.e., at the beginning of Yr. 5) and the depreciation charge during this year (i.e., Yr. 5) by the declining balance method. Also, find the book value at the end of Yr. 5. 2. A company is purchasing a new equipment in Class 8 (20% CCA rate -- declining balance class, half year rule applicable) in 2010 for $32,000. The machine is expected to result in annual revenue of $14,000 for each of the next five years and will be sold at the end of that time for an expected salvage value of $12,000. Maintenance expenses are
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