Question
A. Your company has the following information about a project. The initial capital investment to buy equipment is $1,200,000 and the company will be able
A. Your company has the following information about a project. The initial capital investment to buy equipment is $1,200,000 and the company will be able to sell the equipment for $500,000 at the end of the project (year 3).
Below is the depreciation table of the capital investment.
| Year | Rate | Depreciation | accumulated depreciation | book value |
| 1 | 20.00% | $240,000 |
|
|
| 2 | 20.00% | $240,000 |
|
|
| 3 | 20.00% | $240,000 | ? | ? |
| 4 | 20.00% | $240,000 |
|
|
| 5 | 20.00% | $240,000 |
|
What's the accumulated depreciation at year 3?
| A. | $480,000 | |
| B. | $720,000 | |
| C. | $1,200,000 | |
| D. | $240,000 |
B.
What is the book value of the equipment at year 3?
| A. | $720,000 | |
| B. | $480,000 | |
| C. | $0 | |
| C. | $960,000 |
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Real Estate Finance
Authors: John P. Wiedemer
8th Edition
0324142900, 9780324142907
