# HW-Chap-11 - Engineering Economy ENGR 300-1 Year SOYD DDB 1...

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Unformatted text preview: Engineering Economy ENGR 300 Chapter 11 11-1 Year SOYD DDB 1 \$2,400 \$3,333 2 \$2,000 \$2,222 3 \$1,600 \$1,482 4 \$1,200 \$988 5 \$800 \$375* 6 \$400 \$0 Sum \$8,400 \$8,400 *Computed \$658 must be reduced to \$375 to avoid depreciating the asset below its salvage value. 11-4 P = \$12,000 S = \$600 N = 4 years (a) Straight Line Depreciation SL depreciation in each year = (P – S)/N = (\$12,000 − \$600)/4 = \$2,850 (b) Sum-of-Years Digits Depreciation SOYD in yr. N = [(Remain. useful life at begin. of yr)/[(N/2)(N +1)]] (P – S) 1st Year: SOYD = (4/10) (\$12,000 − \$600) = \$4,560 2nd Year: = (3/10) (\$12,000 − \$600) = \$3,420 3rd Year: = (2/10) (\$12,000 − \$600) = \$2,280 4th Year: = (1/10) (\$12,000 − \$600) = \$1,140 Sum = \$11,400 (c) Double Declining Balance Depreciation DDB in any year = 2/N (Book Value) 1st Year: DDB = (2/4) (\$12,000 − \$0) = \$6,000 2nd Year: = (2/4) (\$12,000 − \$6,000) = \$3,000 3rd Year: = (2/4) (\$12,000 − \$9,000) = \$1,500 4th Year: = (2/4) (\$12,000 − \$10,500) = \$750 Sum = \$11,250 (d) The special handling devices fall into the 3-year MACRS class life from Table 11-2. The percentages from Table 11-3 are multiplied by the initial cost of \$12,000 and the asset is depreciated to a book value of 0. In year 4 the \$600 salvage value is recaptured asset is depreciated to a book value of 0....
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## This note was uploaded on 04/18/2011 for the course ENGINEER 300 taught by Professor Kashayar during the Spring '11 term at California State University Los Angeles .

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HW-Chap-11 - Engineering Economy ENGR 300-1 Year SOYD DDB 1...

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