Question
Part A: Suppose that Petrobras assumes a zero salvage value for their Equipment and other assets. For each $100 in new asset investments, what is
Part A: Suppose that Petrobras assumes a zero salvage value for their "Equipment and other assets." For each $100 in new asset investments, what is the annual amount of depreciation expense charged to the income statement?
Part B: Suppose that other leading energy companies charge $12 in depreciation expense for each $100 invested in new equipment. Are Petrobras' depreciation policy assumptions materially different from those of their competitors? Support your answer.
(So I think that I need to divide the cost of the asset by the total life of the asset to get the answer to part A, but I have no idea what numbers I need to sure to do it or what the other companies have to do with anything. Please help)
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