Question
13. The original price of a distillation column is 24 000 ECU and the default service life is 8 years. Accumulation method in the pool
13. The original price of a distillation column is 24 000 ECU and the default service life is 8 years. Accumulation method in the pool to determine the depreciation rate (an equal amount of money is allocated every year, and the first money is allocated at the end of the first year, so that there is enough capital accumulation in the depreciation fund at the end of the service life to cover the loss in the value of machinery and equipment.) is used (sinking fund method). The annual effective interest rate for the money allocated to the amortized fund is 6%. Since the scrap value of the distillation column is 4 000 ECU at the end of its service life, what happens to the replacement price (asset value or total book value) of the column at the end of five years? (12 607 ECU)
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