1. The Outback Steakhouse main office has purchased a $100,000 online document imaging system with an estimated useful life of 8 years and a tax depreciation recovery period of 5 years. Compare the present worth of total depreciation for (a) the SL method, (b) the DDB method, and (c) DDB-to-SL switching (d) Perform the DDB-to-SL switch and plot the book values. Use a rate of i=10% per year.

1. The Outback Steakhouse main office has purchased a $100,000 online document imaging system with an estimated useful life of 8 years and a tax depreciation recovery period of 5 years. Compare the present worth of total depreciation for (a) the SL method, (b) the DDB method, and (c) DDB-to-SL switching (d) Perform the DDB-to-SL switch and plot the book values. Use a rate of i=10% per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Step 2: a) Compute the present worth of total depreciation using the SL method

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Step 3: b) Compute the present worth of total depreciation using the DDB method

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Step 4: c) Compute the present worth of total depreciation using the DDB to SL switching method

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Step 5: d) Perform the DDB-to-SL switch and plot the book values

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