Q 3. The manager of Collison Ltd has purchased a new price of equipment to help speed up theproduction line. The equipment cost 50,000 and is expected to last for five years. At the end ofthisperiod the equipment can be traded in for the value of 4000.Required: You are required to calculate the depreciation for each year on the asset using both straightline and reducing balance methods.

In straight line depreciation method uniform annual depreciation is considered based on economic…

tion line. The equipment cost 50,000 and is expected to last for five years. At the e the equipment can be traded in for the value of 4000. ou are required to calculate the depreciation for each year on the asset using both str ucing balance methods.

tion line. The equipment cost 50,000 and is expected to last for five years. At the e the equipment can be traded in for the value of 4000. ou are required to calculate the depreciation for each year on the asset using both str ucing balance methods.

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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Question

Q 3. The manager of Collison Ltd has purchased a new price of equipment to help speed up the
production line. The equipment cost 50,000 and is expected to last for five years. At the end of
this
period the equipment can be traded in for the value of 4000.
Required: You are required to calculate the depreciation for each year on the asset using both straight
line and reducing balance methods.

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Consider the following data on a car: Cost basis of the asset, CO = BD 5423 Useful life, N = 2 years Estimated Salvage value, CL = BD 2,000 Interest rate, i = 15% Compute the annual depreciation allowances and the resulting book values. Using sinking fund method.
Provide step by step manual solution, given, and depreciation table for below mentioned problem. Make sure yet that your answer is the same as the given answer before sending your solution. An asset costing P50,000 has a life expectancy of 6 years and an estimated salvage value of P8,000. Calculate the depreciation charge at the end of the fourth period using fixed-percentage method. Answer. P5,263.87
Show the solution in good accounting form
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A two-year project has an initial requirement of $500,000 for fixed assets and $100,000 for net working capital. The fixed assets will be depreciated using MACRS and the fixed asset falls into the three-year MACRS class. Depreciation rates for years 1 and 2 are 0.3333 and 0.4445. The estimated salvage value is $120,000. All of the net working capital will be recouped at the end of the 2 years. Management estimates that sales revenues less costs will be $700,000 per year for years 1 and 2. The discount rate is 9 percent and tax rate is 35 percent. What is the initial investment for this project? $513,327.50 ○ $600,000 $1,300,000 $500,000
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