Question
Hwan wants to compare straight-line depreciation amounts with declining balance depreciation amounts to determine which method is more favorable for the company's balance sheet. In
Hwan wants to compare straight-line depreciation amounts with declining balance depreciation amounts to determine which method is more favorable for the company's balance sheet. In the range G4:G6, he estimates that the construction equipment will be worth $800,000 in tangible assets at the beginning of the loan, and that the useful life of these assets is 10 years with a salvage value of $128,000. Start by calculating the straight-line depreciation amounts as follows:
In cell B23, enter a formula using the SLN function to calculate the straight-line depreciation for the construction equipment during the first year of operation.
Use absolute references for the cost, salvage, and life arguments in the SLN formula.
Fill the range C23:K23 with the formula in cell B23 to calculate the annual and cumulative straight-line depreciation in Years 210.
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