Salvage Value The number of years n for a piece of machinery to depreciate to a known salvage value can be found using the formula n = log s − log i log ( 1 − d ) where s is the salvage value of the machinery, i is its initial value, and d is the annual rate of depreciation. (a) How many years will it take for a piece of machinery to decline in value from $ 90 , 000 to $ 10 , 000 if the annual rate of depreciation is 0.20 ( 20 % ) ? (b) How many years will it take for a piece of machinery to lose half of its value if the annual rate of depreciation is 1 5 % ?
Salvage Value The number of years n for a piece of machinery to depreciate to a known salvage value can be found using the formula n = log s − log i log ( 1 − d ) where s is the salvage value of the machinery, i is its initial value, and d is the annual rate of depreciation. (a) How many years will it take for a piece of machinery to decline in value from $ 90 , 000 to $ 10 , 000 if the annual rate of depreciation is 0.20 ( 20 % ) ? (b) How many years will it take for a piece of machinery to lose half of its value if the annual rate of depreciation is 1 5 % ?
Solution Summary: The author calculates how many years it will take for a piece of machinery to lose half of its value if the annual rate of depreciation is 15 %.
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