HW-Chap-11 - Engineering Economy ENGR 300 Chapter 11 11-1...

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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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HW-Chap-11 - Engineering Economy ENGR 300 Chapter 11 11-1...

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