Suggested problems_Chp 7_sol

# Suggested problems_Chp 7_sol - Suggested problems for...

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Unformatted text preview: Suggested problems for Chapter 7 - Solutions 1. (7.8) Asset class 13.3 Basis \$60,000 MV 14 \$12,000 N 14 R 0.142857 Class life 14 GDS recovery is 7 years ADS recovery is 14 years SL Method EOY, k d k BV k 0 \$60,000 1 \$3,429 \$56,571 2 \$3,429 \$53,143 3 \$3,429 \$49,714 4 \$3,429 \$46,286 5 \$3,429 \$42,857 200% DB method with switchover to SL method Depreciation method EOY, k Beginning BV 200% DB method SL method Amount selected 1 \$60,000 \$8,571.43 \$3,428.57 \$8,571.43 2 \$51,428.57 \$7,346.94 \$3,032.97 \$7,346.94 3 \$44,081.63 \$6,297.38 \$2,673.47 \$6,297.38 4 \$37,784.26 \$5,397.75 \$2,344.02 \$5,397.75 5 \$32,386.51 \$4,626.64 \$2,038.65 \$4,626.64 6 \$27,759.86 \$3,965.69 \$1,751.10 \$3,965.69 GDS ADS EOY, k r k d k BV k EOY,k d k BV k 0 \$60,000 0 \$60,000 1 0.1429 \$8,574 \$51,426 1 \$2,143 \$57,857 2 0.2449 \$14,694 \$36,732 2 \$4,286 \$53,571 3 0.1749 \$10,494 \$26,238 3 \$4,286 \$49,286 4 0.1249 \$7,494 \$18,744 4 \$4,286 \$45,000 5 0.0893 \$5,358 \$13,386 5 \$4,286 \$40,714 2. (7.15) a. Cost basis = 3 x \$500,000 + \$35,000 + \$50,000 = \$1,585,000 b. Class life is 10 years c. d 5 = 0.0893 x 1,585,000 = \$141,540.50 d. Depreciation till EOY 6 = (0.1429 + 0.2449 + 0.1749 + 0.1249 + 0.0893 + 0.0892/2) x 1,585,000 + 0....
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## This note was uploaded on 02/07/2012 for the course IE 343 taught by Professor Vincent,g during the Spring '08 term at Purdue.

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Suggested problems_Chp 7_sol - Suggested problems for...

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