HW 8 Solution Method 1.xlsx - interest rate = Initial Cost(Po = \$ n 1 2 3 4 5 6 7 8 9 \$ \$ \$ \$ \$ \$ \$ \$ \$ 7(500,000 Salvage Value AOC \$(S \$(150,000 \$

# HW 8 Solution Method 1.xlsx - interest rate = Initial...

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interest rate = 7% Initial Cost (Po) = \$ (500,000) n AOC, \$ 1 \$ (150,000) \$ 375,000 2 \$ (150,000) \$ 281,250 3 \$ (150,000) \$ 210,938 4 \$ (200,000) \$ 158,203 5 \$ (200,000) \$ 118,652 6 \$ (200,000) \$ 88,989 7 \$ (250,000) \$ 66,742 8 \$ (250,000) \$ 50,056 9 \$ (250,000) \$ 37,542 Salvage Value (S), \$
AW(P0) AW(S) AW(AOC) (\$535,000.00) \$375,000.00 (\$140,186.92) (\$150,000.00) (\$276,545.89) \$135,869.57 (\$271,202.73) (\$150,000.00) (\$190,525.83) \$65,612.46 (\$393,647.41) (\$150,000.00) (\$147,614.06) \$35,631.79 (\$546,226.45) (\$161,261.41) (\$121,945.35) \$20,632.54 (\$688,823.68) (\$167,997.69) (\$104,897.90) \$12,440.32 (\$822,092.13) (\$172,471.48) (\$92,776.61) \$7,712.25 (\$977,779.57) (\$181,430.15) (\$83,733.88) \$4,878.89 (\$1,123,281.84) (\$188,113.50) (\$76,743.24) \$3,134.28 (\$1,259,265.28) (\$193,280.18) PRESENT WORTH (AOC)
AW (k years) (\$310,000.00) (\$290,676.33) (\$274,913.37) (\$273,243.67) (\$269,310.50) (\$264,929.05) ESL=6 (\$266,494.51) (\$266,968.49) (\$266,889.14)
interest rate = 8% Initial Cost (Po) = \$ (150,000) n AOC, \$ 1 \$ (25,000) \$ 120,000 2 \$ (30,000) \$ 96,000 3 \$ (35,000) \$ 76,800 4 \$ (40,000) \$ 61,440 5 \$ (45,000) \$ 49,152 6 \$ (50,000) \$ 39,322 7 \$ (55,000) \$ 31,457 8 \$ (60,000) \$ 25,166 The company should retain th Salvage Value (S), \$
AW(P0) AW(S) AW(AOC) (\$162,000.00) \$120,000.00 (\$23,148.15) (\$25,000.00) (\$84,115.38) \$46,153.85 (\$48,868.31) (\$27,403.85) (\$58,205.03) \$23,656.97 (\$76,652.44) (\$29,743.72) (\$45,288.12) \$13,634.81

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• Fall '19
• Depreciation, salvage value, \$310,000.00, \$375,000.00, \$393,647.41

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