The La Salle Bus company has decided to purchase a new busfor $ 85,000 with a trade in of their old bus. The old bus has abook value of $ 10,000 at the time of the trade-in. The new buswill be kept for ten years before being sold. Its estimatedsalvage value at the time is expected to be $5,000.00Book value = $ 85,000(New Bus) + 10,000 (Old Bus)%3DBus Asset class = 9 yearsSolve for the depreciation using the 3 classical method, use a200% for DBM

Depreciation refers to reduction in the asset value over the expected time period or to the useful…

e La Salle Bus company has decided to pure $ 85,000 with a trade in of their old bus. Th ok value of $ 10,000 at the time of the trade- be kept for ten years before being sold. Its vage value at the time is expected to be $5, ok value = $ 85,000(New Bus) + 10,000 (Old Bu

e La Salle Bus company has decided to pure $ 85,000 with a trade in of their old bus. Th ok value of $ 10,000 at the time of the trade- be kept for ten years before being sold. Its vage value at the time is expected to be $5, ok value = $ 85,000(New Bus) + 10,000 (Old Bu

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 4PROB

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Question

The La Salle Bus company has decided to purchase a new bus
for $ 85,000 with a trade in of their old bus. The old bus has a
book value of $ 10,000 at the time of the trade-in. The new bus
will be kept for ten years before being sold. Its estimated
salvage value at the time is expected to be $5,000.00
Book value = $ 85,000(New Bus) + 10,000 (Old Bus)
%3D
Bus Asset class = 9 years
Solve for the depreciation using the 3 classical method, use a
200% for DBM

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