Question
1. You work as an engineer for a municipality that is building a sewage treatment plant for a cost of $450,000, with an estimated salvage
1. You work as an engineer for a municipality that is building a sewage treatment plant for a cost of $450,000, with an estimated salvage value of $25,000. The projected useful life of the treatment plant is 20 years.
a) Suppose your municipality is able to scrap the plant for parts at the end of its usable life and sell the parts for a total of $50,000. Which of the following situations apply? a. depreciation recapture b. losses c. capital gains d. sum of years' digits e. recovery
b) Suppose your municipality is unable to scrap the plant for parts at the end of its usable life and has to pay $10,000 to dispose of all the parts. Which of the following situations apply? a. depreciation recapture b. losses c. capital gains d. discount rate e. recovery
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