Tartantrips Ltd, a company in Scotland, operates several ferries and has a policy of holding several in
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Tartantrips Ltd, a company in Scotland, operates several ferries and has a policy of holding several in reserve, due to the weather patterns and conditions of various contracts with local authorities. A ferry costs £5 million and has an estimated useful life of 10 years, at which time its realizable value is expected to be £1 million.
Calculate and discuss three methods of depreciation that the company may use:
(i) sum of the digits
(ii) straight line
(iii) reducing balance.
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