A new hybrid car was purchased by Pedernales Electric Cooperative as a courier vehicle to transport items
Question:
A new hybrid car was purchased by Pedernales Electric Cooperative as a courier vehicle to transport items between its 12 city offices. The car cost $30,000 and was retained for 5 years. Alternatively, it could have been retained for 100,000 miles. Salvage value is nil. Five-year DDB depreciation was applied. The car pool manager stated that he prefers UOP depreciation on vehicles because it writes off the first cost faster. Use the actual annual miles driven, listed below, to plot the book values for both methods. Determine which method would have removed the $30,000 faster. Show hand or spreadsheet solution, asinstructed. Salvage Value Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Transcribed Image Text:
Year Miles Driven, 1000 15 22 16 18 24
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