Engineering Economics Exam! Please help! Chapter 08, Problem 012 (Video Solution

Question

Engineering Economics Exam! Please help!

Chapter 08, Problem 012 (Video Solution) A surface mount PCB placement/soldering line is to be installed for $2,700,000. It will have a salvage value of $100,00 after 5 years. Determine the depreciation deduction and the resulting unrecovered investment during each year of the asset's life Click here to access the s Table Calculator Part a EK Your answer is incorrect. Try again. Determine the depreciation deduction and the resulting unrecovered investment during each year of the asset's life using straight-line depreciation EOY Depreciation Balances 520000 2180000 780000 1400000 499200 900800 608300 292500 292500 315800 169550 146250 Sum depreciation 2530450

Explanation / Answer

Details Amt $ Cost of Asset            2,700,000 Salvage value after 5 years                100,000 Depreciable value              2,600,000 Useful life in years                             5 Yearly depreciation by SL method                520,000 Depreciation details using SL depreciation Year Depreciation Expense Balance Year 1                520,000         2,180,000 Year 2                520,000         1,660,000 Year 3                520,000         1,140,000 Year 4                520,000            620,000 Year 5                520,000            100,000 Using MACRS 5 year depreciation rate Year Depreciation rate Depreciation Expense Balance Year 1 20.00%            540,000         2,160,000 Year 2 32.00%            864,000         1,296,000 Year 3 19.20%            518,400             777,600 Year 4 11.52%            311,040             466,560 Year 5 11.52%            311,040             155,520

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