A restaurant is considering installing a new set of kitchen appliances costing $30,000 with an additional installation and delivery cost of $10,000. The set of appliances is expected to have a useful life of 15 years and a salvage value of $9,000. Use the declining balance (DB) method for the following questions.

a. What is the cost basis for the set of appliances?

b. In the declining balance depreciation method, a constant amount is depreciated yearly over the assets life.

True

False

c. What will be the value of \alpha if we use a depreciation rate of 200%?

1/N

1.5/N

2/N

d. Using a depreciation rate of 200%, fill in the following blanks. Round your answers to the nearest dollar

n	Dn	Bn
1
2
3
4	BLANK A
5
6
7
8
9		BLANK B
10
11
12
13
14
15		BLANK C

i. What is the value in BLANK A?

ii. What is the value in BLANK B?

iii. What is the value in BLANK C?

e. Consider the scenario described in part d. If we were to use the switch over method, in what year would you switch over to the straight-line method (SLN)?

f. What should you use in order to depreciate down to the salvage value given? Round to the nearest thousandth. (For example. If you get 10.8467%, enter10.847.)

g. Using the you found in part f, to answer the following questions. Round your answers to the nearest dollar. (Use the value of that you entered as answer in pervious question)

n	Dn	Bn
1
2
3
4	BLANK A
5
6
7
8
9		BLANK B
10
11
12
13
14
15		BLANK C

i. What is the value in BLANK A?

ii. What is the value in BLANK B?

iii. What is the value in BLANK C?