Chapter 9, Problem 4RQ

A $659,000 property is depreciated for tax purposes by its owner with the straight-line depreciation method. The value of the building, y, after x months of use is given by  y = 659,000 − 1800x dollars.  After how many months will the value of the building be $459,200?  x = months

Describe the two stages involved in pricing an estimate.

Why is the “straight-line method” not a satisfactory way to calculate depreciation?

Checker LLC has purchased a $100,000 asset to be located in its Italianfacility. Either of two classical depreciation models is allowed: SL depreciationover 5 years with a salvage of $10,000 or DDB depreciation over 6 years with nosalvage considered. The asset is expected to be discarded after 5 years.Use the SLN and DDB functions to plot the book value curves and determinewhich method has a lower BV after 5 years.

Using straight-line depreciation, what is the depreciation charge in the fifth year for an asset costing $144800 that has a salvage value of $41800 after 9 years?

4. An equipment costing P250,000 has an estimated life of 15 years with a book value of P30,000 at the endof the period. Compute the depreciation charge and its book value after 10 years using sinking fund methodassuming i = 8%.   WITH CASH FLOW DIAGRAM

Why is the contractor liable of providing the surety bonds to obtain written release prior to the final payment on projects?

The first progress payment received by the contractor is signifiedby the first vertical segment of the income curve inFigures 4.1, 4.2, and 4.3. Why is this first payment shown atthe end of the second month instead of at the end of the firstmonth?