Bike Share Toronto knows that it has to continually purchase and replace their bicycle feet . In January of 2016 their inception year Bike Share purchased 100 bicycles at a price of $500 per bicycle . Each bicycle has a life of 10 000 kilometers and an expected market salvage value $50 . The average bicycle is ridden 2 ,100 kim per year . The accountant is internally using a Unit - of - Production ( with mileage ) depreciation method . The bicycles fall under Class 9 of the Capital Cost Allowance Rates and the government requires a Capital Cost allowance of 30% You now at the start of 2018 are a junior engineer at a consulting company helping to advise on a replacement schedule , and have determined the following information The market salvage value of the old fleet decreases at the same rate a the internal depreciation Past year ( 2017 ) operating expenses for each bike were $200 ; they are expected to increase 10% per annum Price of the best available replacement option : $900 per bike Economic life of the best available replacement option : 14 900 kem End of life salvage value of each of the replacement bicycles : $50 per bike Operating expenses for each replacement bicycle in the feet : $150 and is expected to remain constant Bike Share's MARR is 8% What is the internal depreciation charge that the accountant will make at the end of 20173 ( 5 marks )