A business purchasing an item for business purposes may use straight-line depreciation to obtain a tax deduction. The formula for the present value, P, after t years is P = C − C − s L t where C is the cost and s is the scrap value after L years. The number L is called the useful life of the item. (a) If a certain piece of equipment costs $15,000 and has a scrap value of $1,700 after 5 years, write an equation to represent the present value after t years.
A business purchasing an item for business purposes may use straight-line depreciation to obtain a tax deduction. The formula for the present value, P, after t years is P = C − C − s L t where C is the cost and s is the scrap value after L years. The number L is called the useful life of the item. (a) If a certain piece of equipment costs $15,000 and has a scrap value of $1,700 after 5 years, write an equation to represent the present value after t years.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A business purchasing an item for business purposes may use straight-line
P = C −
t
| C − s |
| L |
where C is the cost and s is the scrap value after L years. The number L is called the useful life of the item.
(a) If a certain piece of equipment costs $15,000 and has a scrap value of $1,700 after 5 years, write an equation to represent the present value after t years.
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