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You have an asset with a cost of investment (I) of $10,000 with a useful life (N) of 5 years, and a salvage value (S) of $2,000 in year 5. What is the book value (B) of the asset at the end of year 3 (i.e. BV3) if you use the linear depreciation method? Hint: Straight Line Depreciation: D₁ = 1 and BV₁= 1- (D₁+ D₂+ D3 +...+ D)

You have an asset with a cost of investment (I) of $10,000 with a useful life (N) of 5 years, and a salvage value (S) of $2,000 in year 5. What is the book value (B) of the asset at the end of year 3 (i.e. BV3) if you use the linear depreciation method? Hint: Straight Line Depreciation: D₁ = 1 and BV₁= 1- (D₁+ D₂+ D3 +...+ D)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You have an asset with a cost of investment (I) of $10,000 with a useful life (N) of 5 years, and a salvage value (S) of $2,000 in year 5. What is the book value (B) of the asset at the end of year 3 (i.e. BV3) if you use the linear depreciation method? Hint: Straight Line Depreciation: D₁ = Sand BV₁= 1- (D₁+ D₂+ D3 +...+ D₂) O $6,000 O $7,000 O $5,200 O $4,000
Transcribed Image Text:You have an asset with a cost of investment (I) of $10,000 with a useful life (N) of 5 years, and a salvage value (S) of $2,000 in year 5. What is the book value (B) of the asset at the end of year 3 (i.e. BV3) if you use the linear depreciation method? Hint: Straight Line Depreciation: D₁ = Sand BV₁= 1- (D₁+ D₂+ D3 +...+ D₂) O $6,000 O $7,000 O $5,200 O $4,000
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