Depreciation and After-Tax Economic Analysis 2. A certain machinery costs P50,000, last 12 years with a salvage value of P5,000. Money is worth 5%. Ifthe owner decides to sell it after using it for 5 years, what should his price be so that he will not lose orgain financially in the transaction? Use sinking fund method of depreciation.An equinment costs P500 000 and has a salvage value of P25 000 after its 25 vears of useful life What

Formula for Sinking method of depreciation: Annual Depreciation as,

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after using it for 5 years, w action? Use sinking fund m

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Depreciation and After-Tax Economic Analysis

2. A certain machinery costs P50,000, last 12 years with a salvage value of P5,000. Money is worth 5%. If
the owner decides to sell it after using it for 5 years, what should his price be so that he will not lose or
gain financially in the transaction? Use sinking fund method of depreciation.
An equinment costs P500 000 and has a salvage value of P25 000 after its 25 vears of useful life What

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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