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7-16 A small company is using the unit-of-production method for determining depreciation costs. The original value of the property is $110,000. It is estimated that the company can produce 11,000 units before the equipment will have a salvage or scrap value of zero; that is, the de- preciation cost per unit produced is $10. The equipment produces 200 units during the first year, and the production rate is doubled each year for the first 4 years. The production rate obtained in the fourth year is then held constant until the value of the equipment is paid off. What would have been the annual depreciation cost if the straight-line method based on this same time period had been used?

7-16 A small company is using the unit-of-production method for determining depreciation costs. The original value of the property is $110,000. It is estimated that the company can produce 11,000 units before the equipment will have a salvage or scrap value of zero; that is, the de- preciation cost per unit produced is $10. The equipment produces 200 units during the first year, and the production rate is doubled each year for the first 4 years. The production rate obtained in the fourth year is then held constant until the value of the equipment is paid off. What would have been the annual depreciation cost if the straight-line method based on this same time period had been used?

Introduction to Chemical Engineering Thermodynamics
Introduction to Chemical Engineering Thermodynamics
8th Edition
ISBN:9781259696527
Author:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Publisher:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Chapter1: Introduction
Section: Chapter Questions
Problem 1.1P
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| 7-16 A small company is using the unit-of-production method for determining depreciation costs. The original value of the property is $110,000. It is estimated that the company can produce 11,000 units before the equipment will have a salvage or scrap value of zero; that is, the de- preciation cost per unit produced is $10. The equipment produces 200 units during the first year, and the production rate is doubled each year for the first 4 years. The production rate obtained in the fourth year is then held constant until the value of the equipment is paid off. What would have been the annual depreciation cost if the straight-line method based on this same time period had been used?
Transcribed Image Text:| 7-16 A small company is using the unit-of-production method for determining depreciation costs. The original value of the property is $110,000. It is estimated that the company can produce 11,000 units before the equipment will have a salvage or scrap value of zero; that is, the de- preciation cost per unit produced is $10. The equipment produces 200 units during the first year, and the production rate is doubled each year for the first 4 years. The production rate obtained in the fourth year is then held constant until the value of the equipment is paid off. What would have been the annual depreciation cost if the straight-line method based on this same time period had been used?
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