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The De La Salle Bus Company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus

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The De La Salle Bus Company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus has a book value of $10,000 at the time of the trade-in. The new bus will be kept nine years before being sold. Its estimated salvage value is expected to be $5,000. The cost basis for the bus will be equal to the original purchase price of the bus plus the book value of the old bus that was traded. Compute the depreciation write-offs and corresponding book values for the bus using the methods listed below. Assume a class life of nine years for the classical methods a. Straight Line Method b. Double Declining Balance Method C. Sum of Years Digits Methoo d. MACRS using a 5-year recovery period Provide a plot of Book Value vs. Time for all four methods on the same graph. Using a MARR of 10% per year, compute the present worth of the depreciation write-offs for each of the four methods

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