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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Transcribed Image Text:11- The RX Drug Company has just purchased a capsulating machine for $76,000. The plant engineer estimates the machine has a useful life of 5
12 years and no salvage value. Compute the depreciation schedule using:
(a) Straight-line depreciation
(b) Double declining balance depreciation (assume any remaining depreciation is claimed in the last year)
(c) 100% bonus depreciation
(d) MACRS
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Under SLM( Straight Line Depreciation), equal depreciation will be charged each year.
VIEWUnder Double Decline method the % depreciation will be twice of SLM.
VIEWUnder 10% bonus depreciation book value of assest will be chargfed as depreciation.
VIEWIn case of MACRS the schedule will be as follow-
VIEW
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