Question
An asset has an initial cost of $65,000 and an estimated salvage value of $5,000 after 12 years. a) What depreciation rate for the declining-balance
An asset has an initial cost of $65,000 and an estimated salvage value of $5,000 after 12 years.
a) What depreciation rate for the declining-balance method would produce a book value at the end of year 12 that comes closest to equaling the estimated salvage value?
b) What amount is accumulated in a depreciation reserve after 5 years if straight-line depreciation is used?
c) What would the depreciation charge be in the eighth year by the sinking fund method if i=4%? d) If the declining-balance rate of depreciation is given as 10%, what would the book value be after 3 years?
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