Question
Loretta Livermore Labs purchased R&D equipment costing $200,000. The interest rate is 5%, salvage value is $20,000, and expected life is 10 years. Compute the
Loretta Livermore Labs purchased R&D equipment costing $200,000. The interest rate is 5%, salvage value is $20,000, and expected life is 10 years. Compute the PW of the depreciation deductions assuming:
a.) Straight Line depreciation
b.) Sum-of-years'-digits depreciation
c.) MACRS depreciation
d.) Double declining balance depreciation
Please solve each part by hand, NO Microsoft Excel functions. Show correct formulas used to solve each part. Please show all work leading up to the correct answer for each part. The correct answers are:
a.) $138,991 b.) $149,123 c.) $174,920 d.) $149,453
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