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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