Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 9, Problem 5P
To determine

Identify the cost basis.

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A radio service panel truck initially costs P 56,000. If resale value at the end of the fifth year is estimated at P 15,000. By means of the Declining Balance Method, determine the yearly depreciation charge for the first and second years.
Centronix Corporation purchased new equipment with an estimated useful life of five years. The cost of the equipment was $200,000, and the residual (salvage) value was estimated to be $25,000. In purchasing the new equipment, an old machine was traded in that had an original cost of $180,000, and had been depreciated at the rate of $18,000 a year. The trade-in allowance was $21,000, and accumulated depreciation amounted to $144,000 at the time of the exchange. What should be the cost basis of the new equipment for tax depreciation purposes?(a) $200,000(b) $215,000(c) $175,000( d) $190,000
A machine costing P 770,339 is estimated to have a life of 10 years. If the annual rate of depreciation is 0.18, determine the total depreciation at the year 9 using a constant percentage of the declining balance method.
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