Some equipment costs $1000, has a 5-year depreciable life, and an estimated $50 salvage value at the

Question:

Some equipment costs $1000, has a 5-year depreciable life, and an estimated $50 at the end of that time. You have been assigned the problem to determine whether to use straight-line or SOYD depreciation. If a 10% interest rate is appropriate, which is the preferred depreciation method for this profitable corporation? Use a spreadsheet to show your computations of the difference in present worths.
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...