You have been asked to attend a seminar with investors for the above project.

For the investors, one of their key interest areas is in depreciation.

(a) Explain how depreciation works as it relates to this project, its usefulness and its applicability; and

(b) Prepare a schedule outlining how the depreciation concept works for the investor, limited to the following items only structure and floor finishes.

For this project, assume the following capital cost breakup: 30% each for the structure, building services and finishes. 10% for other add ones like fees, and authority charges. Land costs are excluded.

Outline any other assumptions you have made in your response