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sjonni was buying a set of machines for the company's production. The complex costs 16,500,000. Transportation costs of 1,250,000 also had to be paid, and

sjonni was buying a set of machines for the company's production. The complex costs 16,500,000. Transportation costs of 1,250,000 also had to be paid, and the cost of installation to bring the machine complex to usable condition amounted to 2,650,000. The estimated lifetime of the investment is 12 years and it is estimated that its value at the end of that time will be 10% of the initial price. The CEO is considering different depreciation methods and asks you to prepare a summary of the depreciation and book value of the investment over the next 12 years based on the following four methods: a) Straight-line depreciation b) Of the book value (declining balance depreciation) c) Double-declining depreciation d) Units-of production depreciation It is estimated that the machine will be able to produce 700,000 units over the next 12 years. As an assumption of annual production volume, the CEO believes that the following estimate in thousands of units is realistic: Year . 1 2 3 4 5 6 7 8 9 10 11 12 Unit . 20 38 55 60 48 56 130 90 73 60 50 20

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