An asset costs 14,000 dollars and has a scrap value of 2,400 dollars after seven years....
An asset costs 14,000 dollars and has a scrap value of 2,400 dollars after seven years. Calculate its book value using straight-line depreciation (Perform all calculations using 5 significant figures and round your answer to the nearest dollar).
(a) After one year?
(b) After four years?
(c) After seven years?
Homework Answers
Answer
Depreciation rate per year =( Asset cost -scrap value)/life
=(14000-2400)/7
=1657.14286
Book value after n years =asset cost - n * depreciation rate per year
========
(a) After one year?
=14000-1657.14286=12342.8571=12343
(b) After four years?
=14000-4*1657.14286=7371.42856=7371
(c) After seven years?
=14000-7*1657.14286=2399.99998=2400
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