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Unformatted text preview: Example 3 John wants to estimate the value of a house 20 years after purchase. The house value declines proportionally every year. The purchase price was $245,000 three years ago, and its salvage value now is estimated as $180,000. What is the estimated value of the house after 20 years? Example 4 A machine has a life of 30 years, costs $245,000, and has a salvage value of $10,000 under the straightline depreciation. What depreciation rate will result in the same book value for both the DB and SL methods at the end of year 20?...
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This note was uploaded on 04/01/2012 for the course MSCI 261 taught by Professor Bonkoo during the Winter '09 term at Waterloo.
 Winter '09
 BONKOO

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