Power to remote transmitting station is provided by a Diesel-electric generating unit. The original cost of the unit was Php75,000. It costs Php3,000 to ship the unit to the job site. An additional cost of Php3,000 was incurred for installations. a) Determine the annual depreciation cost by the Declining Balance Method if the unit has an expected life of 10 years. The salvage value of the unit at the end of its life was estimated at Php5,000. b) Determine the annual depreciation cost using the sinking fund method. Assume that the annual charge for depreciation was deposited in a fund drawing compound interest at the rate of 5%.
Power to remote transmitting station is provided by a Diesel-electric generating unit. The original cost of the unit was Php75,000. It costs Php3,000 to ship the unit to the job site. An additional cost of Php3,000 was incurred for installations. a) Determine the annual depreciation cost by the Declining Balance Method if the unit has an expected life of 10 years. The salvage value of the unit at the end of its life was estimated at Php5,000. b) Determine the annual depreciation cost using the sinking fund method. Assume that the annual charge for depreciation was deposited in a fund drawing compound interest at the rate of 5%.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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Power to remote transmitting station is provided by a Diesel-electric generating unit. The original cost of the unit was Php75,000. It costs Php3,000 to ship the unit to the job site. An additional cost of Php3,000 was incurred for installations. a) Determine the annual
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