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Company B purchased equipment that cost 750,000 with salvage value of 150,000 after 10 year for both plant in the United States and Hong Kong.
Company B purchased equipment that cost 750,000 with salvage value of 150,000 after 10 year for both plant in the United States and Hong Kong. MACRS depreciation with n=5 year is applied in the United States and standard SL depreciation with n=10 years is used in Hong Kong.
1. Develop and graph the book value for both plants.
2. If the equipment is sold after year 10 for 100,000, find the over or under depreciated amounts for each plant.
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