8. A machine has an initial cost of $ 50,000, annual operation and maintenance cost of $ 5,000 a salvage value of $ 6,000 and a life of 10 years. Assume an annual interest rate of 6%. a) What is the depreciation value for the machine using straight line depreciation? b) What is the book value of this machine at the end of the fifth year using straight line depreciation?
8. A machine has an initial cost of $ 50,000, annual operation and maintenance cost of $ 5,000 a salvage value of $ 6,000 and a life of 10 years. Assume an annual interest rate of 6%. a) What is the depreciation value for the machine using straight line depreciation? b) What is the book value of this machine at the end of the fifth year using straight line depreciation?
Chapter1: Financial Statements And Business Decisions
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Please answer question 8 with details on how to do it. Thank you.
Transcribed Image Text:8. A machine has an initial cost of $ 50,000, annual operation and maintenance cost of $ 5,000
a salvage value of $ 6,000 and a life of 10 years. Assume an annual interest rate of 6%.
a) What is the depreciation value for the machine using straight line depreciation?
b) What is the book value of this machine at the end of the fifth year using straight line
depreciation?
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