Ferryman Example 3 (DDB Depreciation)

Ferryman Example 3 (DDB Depreciation) - generates $9.00 in...

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Ferryman Example 3 (DDB Depreciation) In 2004, Ferryman Company, a titanium producer in Pennsylvania, expanded its operations with the purchase of a $10 million rolling mill. Assume the new mill was fired up at the start of 2005 and runs at its peak capacity of 4 million pounds of output per year for 10 years. Assume that each pound of output
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Unformatted text preview: generates $9.00 in revenues while costing $4.00 to produce. Assume that O&M costs are $10 million in 2005 and grow by $1 million per year after that. At the end of 10 years the mill will be sold for scrap for $500,000. Calculate the annual depreciation amount and book value through 2007 using double-declining balance depreciation....
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