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Consider the following data on an automobile: Cost basis of the asset (I) = $200,000; Useful life (N) = 4 years; Estimated salvage value (S)
Consider the following data on an automobile:
Cost basis of the asset (I) = $200,000;
Useful life (N) = 4 years;
Estimated salvage value (S) = $0
Determine the optimal time to switch from double-declining balance to straight-line depreciation and the resulting depreciation schedule (depreciation allowances and book values.)
Year | Dn (DDB) | Bn (DDB) | Dn (SL) | Bn (Final) | |
0 | |||||
1 | |||||
2 | |||||
3 | |||||
4 |
What year should you switch?
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