Question

The price of the cellular phone is expected to decline at the rate of 11% annually...

The price of the cellular phone is expected to decline at the rate of 11% annually because of obsolescence. If the current selling price is ?24,000.00, how much will it cost after 5 years? Use the declining balance method

Homework Answers

Answer #1
Year Cost
(A)
Accumulated Depreciation
(B)
Opening
NBV
C=(A-B)
Rate
(D)
Depreciation
this year
E=(CxD)
Accumulated
Depreciation
F=B+E
Closing
NBV
A-F
1 24,000 0 24000 11% 2640 2640 21360
2 24000 2640 21360 11% 2349.6 4989.6 19010.4
3 24000 4989.6 19010.4 11% 2091.144 7080.744 16919.256
4 24000 7080.744 16919.256 11% 1861.11816 8941.86216 15058.13784
5 24000 8941.86216 15058.13784 11% 1656.395 10598.257 13401.7428
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