A company uses a computer for its employees to record their entry and exit digitally, the equipment cost $ 32,000. If the useful life is estimated to be 10 years and it has a scrap value of $ 7,500, determine: a) What is the annual depreciation amount (annual rate)? b) What will be the value of the equipment after 5 years?

A company uses a computer for its employees to record their entry and exit digitally, the equipment cost $ 32,000. If the useful life is estimated to be 10 years and it has a scrap value of $ 7,500, determine: a) What is the annual depreciation amount (annual rate)? b) What will be the value of the equipment after 5 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) What is the annual depreciation amount (annual rate)?

b) What will be the value of the equipment after 5 years?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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