Given: C, = 10,000.00 C, = 500.00 %3D n = 5 years Tabulate the annual depreciation charge and book value after 5 years so that you can identify what method has the largest annual depreciation charge: a) SLM b) SFM (assume 10% interest) c) DBM d) SYDM
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- The formulas for depreciation method A is almost the same with depreciation method B except that in A, 2/n (where n is the life of the asset) is used in place of k in method B. What is depreciation method A? Declining Balance Method Sum of Years' Digit Method Sinking Fund Method Straight-Line Method Double Declining Balance MethodA machine was purchased for $ 8,000, with an estimated useful life of 10 years, and it has a scrap value of $ 1,000 and rate of interest = %1O. Calculate the following: The book value at the end of the ninth year using Sum of the Years- Digits method. * The book value at the end of the fourth year using constant percentage method. * The depreciation installment for the sixth year using straight line method. *>/ The following table represents a depreciation case. Complete the table End of year Depreciation Charge 0 1 2 3 4 Book Value During the year at the end of the year $5000 $400 $1000
- The lender charges the barrower 1.8% per quarter. Find the equivalent nominal rate of interest. Include the unit for nominal rate.Compute the future value of the following deposits made today:a. $10,000 at 6.75% compounding annually for 10 yearsb. $10,000 at 6.75% compounding quarterly for 10 yearsc. $10,000 at 6.75% compounding monthly for 10 yearsBond is IOU with face value (V), coupon rate (b), no. of payment periods/year (C), dividend (I), and maturity date (n). Amount paid for the bond is P. |= Vb/c General equation for i*: 0-- P + I(P/A,i*,nxc) + V(P/F,i*,nxc) A $10,000 bond with 6% interest payable quarterly is purchased for $8000. If the bond matures in 5 years, what is the ROR (a) per quarter, (b) per year? (a) 1= 10,000(0.06)/4 = v per quarter ROR equation is: 0 = - 8000 + 150(P/A,i*,20) + 10,000(P/F,i*,20) By trial and error or spreadsheet: * = v per quarter (b) Nominal i* per year = 2.8(4) = v per year %3D Effective i* per year = (1 + 0.028)4 -1 = v per year
- Q.5 A construction engineer invests a sum of $10 000 in a bank at a nominal interest rate of 16% for 10 years. The compounding is quarterly. Find the maturity amount of the deposit after 10 years?Using declining-balance depreciation with d = 18 percent, what is the depreciation charge in the 9 year for an asset costing $156400?An asset was purchased at 480,000.00. It has an estimated life of 10 years, and is sold at 50,000.00. What is the depreciation of the first year?
- Determine the accumulated and the discounted value of $1000 over 55 days at 7% using both ordinary and exact simple interest. (Do not round intermediate calculations. Round your answers to 2 decimal places.) S Ordinary interest S Exact interest $4- The cash flows have a present value of 0. Compute the value of J, assuming a 6% interest rate. 15 1000 1000 1000 0-1 —3—12. An asset is purchased for P120,000.00. Its estimated economic life is 10 years, after which it will besold for P12,000,00. Find the depreciation for the first year using the sum-of-the-year's digit. (SOYD). with cash flow 13. An asset is purchased for P9,000.00. Its estimated life is 10 years, after which it will be sold forP1,000.00. Find the book value during the third year if sum-of-the-year's digit (SOYD) depreciation is used with cash flow