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A tractor for over-the-road hauling is purchased for $95,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,600.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 15233.33 3600 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 34,578 3600 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4170 book value for year 6 = $ 8340.19 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $

A tractor for over-the-road hauling is purchased for $95,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,600.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 15233.33 3600 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 34,578 3600 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4170 book value for year 6 = $ 8340.19 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $

Essentials Of Investments
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
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A tractor for over-the-road hauling is purchased for $95,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,600.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 15233.33 3600 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 34,578 3600 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4170 book value for year 6 = $ 8340.19 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $
Transcribed Image Text:A tractor for over-the-road hauling is purchased for $95,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $3,600.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 15233.33 3600 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 34,578 3600 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4170 book value for year 6 = $ 8340.19 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $
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