You purchased a company for $5,500,000. The value of each piece of the company is as follows: Equipment $ 600,000 Building (not including land) $ 4,500,000 Land $ 400,000 The building has an expected salvage value of $2,000,000 and will be depreciated using the MACRS method over 10 years. The equipment will be depreciated using the SOYD method over six years and has no salvage value. Assuming the land does not increase in value what is the book value of the company in five years? Select One: a) 1,689,071 b) 1,728, 700 c) 1,745, 325 d) 2,089,071 e) 2,487,345
You purchased a company for $5,500,000. The value of each piece of the company is as follows: Equipment $ 600,000 Building (not including land) $ 4,500,000 Land $ 400,000 The building has an expected salvage value of $2,000,000 and will be depreciated using the MACRS method over 10 years. The equipment will be depreciated using the SOYD method over six years and has no salvage value. Assuming the land does not increase in value what is the book value of the company in five years? Select One: a) 1,689,071 b) 1,728, 700 c) 1,745, 325 d) 2,089,071 e) 2,487,345
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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