A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Its estimated SV at the time is expected to be $5,000. Use this information to solve, Using the MACRS (GDS recovery period), if the equipment is sold in year five, the BV at the end of year five is equal to (a) $29,453 (b) $24,541 (c) $12,672 (d) $6,336.
A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Its estimated SV at the time is expected to be $5,000. Use this information to solve, Using the MACRS (GDS recovery period), if the equipment is sold in year five, the BV at the end of year five is equal to (a) $29,453 (b) $24,541 (c) $12,672 (d) $6,336.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Its estimated SV at the time is expected to be $5,000. Use this information to solve, Using the MACRS (GDS recovery period), if the equipment is sold in year five, the BV at the end of year five is equal to (a) $29,453 (b) $24,541 (c) $12,672 (d) $6,336.
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