PEPSI purchased an equipment for P53,000 and paid P1,500 for freight and delivery charges to the job site. The equipment has a normal life of 10 years with a trade-in value of P5,000 against the purchase of a new equipment at the end of the life. Determine the annual depreciation cost by the sinking fund method. Assume the interest at 6-1/2% compounded annually.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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PEPSI purchased an equipment for P53,000 and paid P1,500 for freight and delivery charges to the job site. The equipment has a normal life of 10 years with a trade-in value of P5,000 against the purchase of a new equipment at the end of the life. Determine the annual depreciation cost by the sinking fund method. Assume the interest at 6-1/2% compounded annually.

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