A certain building has a salvage value of P1,000,000 after 40 years. Annual depreciation is P2,000,000. Using the Straight Line Method, how many years should you sell the building for P30,000,000?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter17: Long-term Investment Analysis
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Problem 1E: A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash...
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1. A certain building has a salvage value of P1,000,000 after 40 years. Annual depreciation is P2,000,000. Using the Straight Line Method, how many years should you sell the building for P30,000,000?

2. A machine costs P2,500,000. At the end of its economic life of six years, its salvage value is P800,000. Using the Sum of the Years Digit Method of Depreciation, what will be its book value for the first year? Prepare a depreciation schedule.

 

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