1 2013 problem 3 parzynski systems is purchasing a

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Unformatted text preview: 3 Parzynski Systems is purchasing a new bar code-scanning device for its service center in Indiana. The table that follows lists the relevant cost items for this purchase. The operating expenses for the new systems are $10,000 per year, and the useful life of the systems is expected to be five years. The SV for depreciation purposes is equal to 25% of the hardware cost. Cost item Hardware Training Installation Cost $200,000 $30,000 $30,000 a. What is the BV of the device at the end of year 3 if the SL depreciation method is used? Solution: The SL depreciation method is used. ( ) ( ) ( ) ( ) b. Suppose that after depreciating the device for two years with the SL method, the firm decides to switch to the double declining balance depreciation method for the remainder of the device’s life (the remaining three years). What is the device’s BV at the end of year 4? Solution: ( But, since 3|Page ) () ( ) NAME (Printed): _________________,________________ (Last) (First) IE 343 –HW #8 Due: Nov. 1, 2013 Problem 4 An...
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This note was uploaded on 11/05/2013 for the course IE 343 taught by Professor Vincent,g during the Fall '08 term at Purdue University-West Lafayette.

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