5 During the construction of a highway bypass, earth- moving equipment costing $40,000 was purchased for use in transporting fill from the borrow pit, At the end of the 4-year project, the equipment will be sold for $20,000. The schedule for moving fill calls for a total of 100,000 cubic feet during the project. In the first year, 40% of the total fill is required; in the second year, 30%; in the third year, 25%; and in the final year, the remaining 5%. Determine the units-of-production depreciation schedule for the equipment.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 18P
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5 During the construction of a highway bypass, earth-
moving equipment costing $40,000 was purchased
for use in transporting fill from the borrow pit, At
the end of the 4-year project, the equipment will be
sold for $20,000. The schedule for moving fill calls
for a total of 100,000 cubic feet during the project.
In the first year, 40% of the total fill is required;
in the second year, 30%; in the third year, 25%;
and in the final year, the remaining 5%. Determine
the units-of-production depreciation schedule for the
equipment.
Transcribed Image Text:5 During the construction of a highway bypass, earth- moving equipment costing $40,000 was purchased for use in transporting fill from the borrow pit, At the end of the 4-year project, the equipment will be sold for $20,000. The schedule for moving fill calls for a total of 100,000 cubic feet during the project. In the first year, 40% of the total fill is required; in the second year, 30%; in the third year, 25%; and in the final year, the remaining 5%. Determine the units-of-production depreciation schedule for the equipment.
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