Concept explainers
Depreciation of Equipment For assets such as machines, whose market values drop rapidly in the early years of usage, businesses often use the double declining-balance method. In practice, a business firm normally employs the double declining-balance method for depreciating such assets for a certain number of years and then switches over to the linear method (see Exercise 50. page 92). The double declining-balance formula is
where C is the initial value of the asset in dollars, V(n) denotes the book value of the assets at the end of n years, and N is the number of years over which the asset is depreciated.
- a. Find V′(n).
Hint: Use logarithmic differentiation.
- b. What is the relative rate of change of V′(n)?
Hint: Find [V′(n)]/[V(n)]. See Section 3.5.
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Chapter 5 Solutions
Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach
- Linear Algebra: A Modern IntroductionAlgebraISBN:9781285463247Author:David PoolePublisher:Cengage Learning