ENG106W12_HW8-solution

ENG106W12_HW8-solution - ENG 106 Homework#8 Solutions Due...

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1 ENG 106 Homework #8 Solutions Winter 2012 Due: Wed, Mar 7, 3 pm, HW box 8.7 Consider the following data on an asset: Cost of the asset, I $110,000 Useful life, N 5 years Salvage value, S $10,000 Compute the annual depreciation allowances and the resulting book values, using the following methods: a) The straight-line depreciation method and calculate the Present Worth of the deductions , year, t d t dep BV PW d 0 $110,000 1 $20,000 $20,000 $90,000 $18,182 2 $20,000 $40,000 $70,000 $16,529 3 $20,000 $60,000 $50,000 $15,026 4 $20,000 $80,000 $30,000 $13,660 5 $20,000 $100,000 $10,000 $12,418 $75,816 b) The double declining depreciation method and calculate the Present Worth of the deductions . year, t d t dep BV PW d $110,000 1 $44,000 $44,000 $66,000 $40,000 2 $26,400 $70,400 $39,600 $21,818 3 $15,840 $86,240 $23,760 $11,901 4 $9,504 $95,744 $14,256 $6,491 5 $4,256 $100,000 $10,000 $2,643 $82,853
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2 8.10 Consider the following data on an asset: Cost of the asset, I $45,000 Useful life, N 7 years Salvage value, S $0 Compute the annual depreciation allowances and the resulting book valuesby using the DDB method and then switching to the SL method. year, t DB dep SL dep dep BV t 0 $45,000 1 $12,857 $6,429 $12,857 $32,143 2 $9,184 $5,357 $22,041 $22,959 3 $6,560 $4,592 $28,601 $16,399 4 $4,686 $4,100 $33,286 $11,714 5 $3,347 $3,905 $37,191 $7,809 6 $2,231 $3,905 $41,095 $3,905 7 $1,116 $3,905 $45,000 $0 8.11 The double-declining-balance method is to be used for an asset with a cost of $90,000,
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ENG106W12_HW8-solution - ENG 106 Homework#8 Solutions Due...

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