Question

The purchase price of a machine is $50,000, its estimated salvage value is $15,000, and its service life is 12 years.

Answer the following questions:

Using the 150% declining balance (150% DB) method:

The depreciation amount in year 3 is close to:

$4,360

$4,440

$4,650

$4,785

$4,870

Using the sum of years’ digits (SOYD) method:

The book value of the machine at the end of year 9 is close to:

$14,050

$14,225

$17,690

$20,005

$22,800

Using the declining balance (DB) method:

If the machine is worth $15,000 at the end of its service life value, the DB rate is close to

0.085

0.142

9.55%

10.0%

11.4%

Answer 1