Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 9, Problem 34P
(a):
To determine
Calculate the cost depletion.
(b):
To determine
Calculate the percentage depletion.
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A company purchased new mining equipment in year 2018 by paying $400,000 cash. The company plans to keep the equipment for several years and use MACRS-GDS depreciation for tax purposes.
Click the icon to view the partial listing of depreciable assets used in business.
Click the icon to view the GDS Recovery Rates (k).
Calculate the depreciation that the company claimed on the asset for year 2 of ownership.
OA. $48,980
OB. $34,980
OC. $17,840
O D. $69,960
○ E. $97,960
Calculate the book value of the asset at the end of year 2.
OA. $365,020
OB. $293,860
OC. $209,900
More Info
O D. $244,880
O E. $174,920
C
More Info
GDS Recovery Rates (r) for the Six Personal Property Classes
Recovery Period (and Property Class)
Year
3-year
5-year
7-year³
10-year²
15-yearb
20-yearb
1
0.3333
0.2000
0.1429
0.1000
0.0500
0.0375
2
0.4445
0.3200
0.2449
0.1800
0.0950
0.0722
3
0.1481
0.1920
0.1749
0.1440
0.0855
0.0668
4
0.0741
0.1152
0.1249
0.1152
0.0770
0.0618
0.1152
0.0893
0.0922
0.0693
0.0571
0.0576
0.0892…
Calculate the value of depreciation of gross
value is $120 million and the net value is
$100 million
An asset purchased for $50,000 has a depreciable life of 5 years, and it has a terminal
book (salvage) value of $5,000 at the end of its depreciable life. With the straight-line
method of depreciation, what is the asset’s book value at the end of year 3?
Chapter 9 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - Prob. 8PCh. 9 - Prob. 9PCh. 9 - Prob. 10P
Ch. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Prob. 13PCh. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - Prob. 27PCh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - Prob. 30PCh. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 33PCh. 9 - Prob. 34PCh. 9 - Prob. 35PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Prob. 38PCh. 9 - Prob. 39PCh. 9 - Prob. 40PCh. 9 - Prob. 41PCh. 9 - Prob. 42PCh. 9 - Prob. 43PCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Prob. 46PCh. 9 - Prob. 47PCh. 9 - Prob. 48PCh. 9 - Prob. 49PCh. 9 - Prob. 50PCh. 9 - Prob. 51PCh. 9 - Prob. 52PCh. 9 - Prob. 53PCh. 9 - Prob. 1STCh. 9 - Prob. 2STCh. 9 - Prob. 3STCh. 9 - Prob. 4ST
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- A company purchased new mining equipment in year 2018 by paying $400,000 cash. The company plans to keep the equipment for several years and use MACRS-GDS depreciation for tax purposes. Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). Calculate the depreciation that the company claimed on the asset for year 2 of ownership. A. $48,980 B. $34,980 C. $17,840 D. $69,960 E. $97,960 Calculate the book value of the asset at the end of year 2. ○ A. $365,020 B. $293,860 OC. $209,900 OD. $244,880 O E. $174,920arrow_forwardDefine the term Gains and Losses on Depreciable Assets?arrow_forwardAn asset with a cost of $100,000 and accumulated depreciation of $80,000 is sold for $8000.What is the amount of the gain or loss on disposal of the plant asset?arrow_forward
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