One of the methods that the Internal Revenue Service allows for computing depreciation of certain business property is the sum-of-the-years'-digits method. If a property valued at C dollars has an estimated useful life of N years and a salvage value of S dollars, then the amount of depreciation D, allowed during the nth year is given by D (CS)- N-(n-1) SN (0 ≤ n ≤N) where S is the sum of the first N positive integers. Thus, N(N + 1) 2 SN = 1+ 2+ + N = The amount of depreciation allowed for a printing machine, which has an estimated useful life of 5 years and an initial value of $450,000 (with no salvage value), is $90,000/year using the straight-line method of depreciation. Determine the amount of depreciation that would be allowed for the first year if the printing machine were depreciated using the sum-of-the-years'-digits method described above. (Round your answer to the nearest cent.) $ Which method would result in a larger depreciation of the asset in its first year of use? O straight-line method O sum-of-the-years'-digits method
One of the methods that the Internal Revenue Service allows for computing depreciation of certain business property is the sum-of-the-years'-digits method. If a property valued at C dollars has an estimated useful life of N years and a salvage value of S dollars, then the amount of depreciation D, allowed during the nth year is given by D (CS)- N-(n-1) SN (0 ≤ n ≤N) where S is the sum of the first N positive integers. Thus, N(N + 1) 2 SN = 1+ 2+ + N = The amount of depreciation allowed for a printing machine, which has an estimated useful life of 5 years and an initial value of $450,000 (with no salvage value), is $90,000/year using the straight-line method of depreciation. Determine the amount of depreciation that would be allowed for the first year if the printing machine were depreciated using the sum-of-the-years'-digits method described above. (Round your answer to the nearest cent.) $ Which method would result in a larger depreciation of the asset in its first year of use? O straight-line method O sum-of-the-years'-digits method
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
Related questions
Question
![One of the methods that the Internal Revenue Service allows for computing depreciation of certain business property is the sum-of-the-years'-digits method. If a property valued at \( C \) dollars has an estimated useful life of \( N \) years and a salvage value of \( S \) dollars, then the amount of depreciation \( D_n \) allowed during the \( n \)th year is given by:
\[
D_n = (C - S) \frac{N - (n - 1)}{S_N} \quad (0 \leq n \leq N)
\]
where \( S_N \) is the sum of the first \( N \) positive integers. Thus,
\[
S_N = 1 + 2 + \cdots + N = \frac{N(N + 1)}{2}.
\]
The amount of depreciation allowed for a printing machine, which has an estimated useful life of 5 years and an initial value of \$450,000 (with no salvage value), is \$90,000/year using the straight-line method of depreciation. Determine the amount of depreciation that would be allowed for the first year if the printing machine were depreciated using the sum-of-the-years'-digits method described above. (Round your answer to the nearest cent.)
\[ \$ \underline{\hspace{2cm}} \]
Which method would result in a larger depreciation of the asset in its first year of use?
- ○ straight-line method
- ○ sum-of-the-years'-digits method](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F79cbc358-f9c7-4513-8a58-8a5e6560b01b%2F202ebd98-adda-4673-966d-0d2a7a2f2537%2Flwnw1pv_processed.png&w=3840&q=75)
Transcribed Image Text:One of the methods that the Internal Revenue Service allows for computing depreciation of certain business property is the sum-of-the-years'-digits method. If a property valued at \( C \) dollars has an estimated useful life of \( N \) years and a salvage value of \( S \) dollars, then the amount of depreciation \( D_n \) allowed during the \( n \)th year is given by:
\[
D_n = (C - S) \frac{N - (n - 1)}{S_N} \quad (0 \leq n \leq N)
\]
where \( S_N \) is the sum of the first \( N \) positive integers. Thus,
\[
S_N = 1 + 2 + \cdots + N = \frac{N(N + 1)}{2}.
\]
The amount of depreciation allowed for a printing machine, which has an estimated useful life of 5 years and an initial value of \$450,000 (with no salvage value), is \$90,000/year using the straight-line method of depreciation. Determine the amount of depreciation that would be allowed for the first year if the printing machine were depreciated using the sum-of-the-years'-digits method described above. (Round your answer to the nearest cent.)
\[ \$ \underline{\hspace{2cm}} \]
Which method would result in a larger depreciation of the asset in its first year of use?
- ○ straight-line method
- ○ sum-of-the-years'-digits method
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
Recommended textbooks for you
Advanced Engineering Mathematics
Advanced Math
ISBN:
9780470458365
Author:
Erwin Kreyszig
Publisher:
Wiley, John & Sons, Incorporated
Numerical Methods for Engineers
Advanced Math
ISBN:
9780073397924
Author:
Steven C. Chapra Dr., Raymond P. Canale
Publisher:
McGraw-Hill Education
Introductory Mathematics for Engineering Applicat…
Advanced Math
ISBN:
9781118141809
Author:
Nathan Klingbeil
Publisher:
WILEY
Advanced Engineering Mathematics
Advanced Math
ISBN:
9780470458365
Author:
Erwin Kreyszig
Publisher:
Wiley, John & Sons, Incorporated
Numerical Methods for Engineers
Advanced Math
ISBN:
9780073397924
Author:
Steven C. Chapra Dr., Raymond P. Canale
Publisher:
McGraw-Hill Education
Introductory Mathematics for Engineering Applicat…
Advanced Math
ISBN:
9781118141809
Author:
Nathan Klingbeil
Publisher:
WILEY
Mathematics For Machine Technology
Advanced Math
ISBN:
9781337798310
Author:
Peterson, John.
Publisher:
Cengage Learning,
