A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero salvage value at that time. The 200% declining balance method is used to depreciate this asset. a. What will the depreciation charge be in year

A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero salvage value at that time. The 200% declining balance method is used to depreciate this asset. a. What will the depreciation charge be in year

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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Question

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A new CNC machine has an installed with a
cost basis of $35,000 and an estimated service
life of seven years. It will have a zero salvage
value at that time. The 200% declining balance
method is used to depreciate this asset.
a. What will the depreciation charge be in year
seven?
b. What will be the book value at the end of
year six?
c. What will be the gain (or loss) on the
disposal of the asset if it is sold for $1,200
after six years?

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