7. An asset has an initial cost of $80,000, a salvage value of $10,000, and a depreciation life of 8 years. Determine the book value for year 3 using straight-line depreciation. a) b) Determine the depreciation for year 3 using double declining balance depreciation. c) Determine the equivalent annual capital recovery plus a return of 10% for year 3, assuming double declining balance depreciation.

7. An asset has an initial cost of $80,000, a salvage value of $10,000, and a depreciation life of 8 years. Determine the book value for year 3 using straight-line depreciation. a) b) Determine the depreciation for year 3 using double declining balance depreciation. c) Determine the equivalent annual capital recovery plus a return of 10% for year 3, assuming double declining balance depreciation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

7. An asset has an initial cost of $80,000, a salvage value of $10,000, and a depreciation life of 8 years.
a)
Determine the book value for year 3 using straight-line depreciation.
b)
Determine the depreciation for year 3 using double declining balance depreciation.
Determine the equivalent annual capital recovery_plus a return of 10% for year 3, assuming double declining
balance depreciation.
c)

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