Given R = 7

Question 4 (25 marks) (a A factory discharges waste-water into a river. The initial concentration of pollutants in the wastewater is 2000 parts per billion (ppb). Before entering the river, the waste-water must pass through water treatment equipment with multiple filters to reduce the concentration to an acceptable level of 10 ppb In order to meet the requirement, two options are under consideration by the factory as follows: o on 1: The factory owner buys water treatment equipment for $(31,000 30xR) which has a useful life of 6 years with salvage value of $(1,600-30xR). o Opti on 2: The factory owner buys water treatment equipment for $(28,000 30xR. The useful life of the equipment is 11 years, and an estimated salvage value of $1,000. i. Create a straight-line (SL) depreciation schedule for the water treatment equipment of Option 1 (4 marks i. If double declining-balance DDB) depreciation is adopted, what is the book value of the water treatment equipment of Option 2 after 5 years? What is the implied salvage value for DDB marks) Question 4 (25 marks) (a A factory discharges waste-water into a river. The initial concentration of pollutants in the wastewater is 2000 parts per billion (ppb). Before entering the river, the waste-water must pass through water treatment equipment with multiple filters to reduce the concentration to an acceptable level of 10 ppb In order to meet the requirement, two options are under consideration by the factory as follows: o on 1: The factory owner buys water treatment equipment for $(31,000 30xR) which has a useful life of 6 years with salvage value of $(1,600-30xR). o Opti on 2: The factory owner buys water treatment equipment for $(28,000 30xR. The useful life of the equipment is 11 years, and an estimated salvage value of $1,000. i. Create a straight-line (SL) depreciation schedule for the water treatment equipment of Option 1 (4 marks i. If double declining-balance DDB) depreciation is adopted, what is the book value of the water treatment equipment of Option 2 after 5 years? What is the implied salvage value for DDB marks)