Question
Rivian, the electric vehicle company, is purchasing a new $250,000 SLS printer for its R&D center in Ann Arbor, Michigan. The operating expense for the
Rivian, the electric vehicle company, is purchasing a new $250,000 SLS printer for its R&D center in Ann Arbor, Michigan. The operating expense for the new system, including consumables and services, is $55,000 per year. The useful life of the system is expected to be five years, and the SV for depreciation purposes is equal to 15% of the purchase cost.
Question 1
What is the BV of the device at the end of year four if the SL depreciation method is used? Show your process to get the credit.
Question 2
What is the amount of depreciation for the SLS printer at the end of the third year if the 200% DB method is used? Show your process to get the credit.
Question 3
If the expected service life for the SLS printer is 60,000 hours, what is the BV of the device at the end of year three, assuming the hours of usage were equally spread over five years? Show your process to get the credit.
Question 4
Suppose that after depreciating the SLS printer for two years with the SL method, Rivian decides to switch to the 150% DB method for the remainder of the devices service life (e.g., the remaining three years). What is the devices BV at the end of the fourth year? Show your process to get the credit.
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