A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero-salvage value at that time. The 200% declining balance method is used to depreciate this asset.What will the depreciation charge be in year seven?What will be the book value at the end of year six?c. What will be the gain (or loss) on the disposal of the asset if it is sold for $1,200 after six years?

Formula: Rate of DDB Depreciation= 100%Usefull Life×2 Given: CNC machine $35,000 Service life 7…

Answered: What will the depreciation charge be in…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section9.A: Depreciation

Problem 1P

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A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero-salvage value at that time. The 200% declining balance method is used to depreciate this asset.

What will the depreciation charge be in year seven?
What will be the book value at the end of year six?
c. What will be the gain (or loss) on the disposal of the asset if it is sold for $1,200 after six years?

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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