100% correct+original+reference....get value for your money - 74787

Solution Detail
Price: $10.00
  • From: ,
  • Posted on: Wed 17 Sep, 2014
  • Request id: # 74776
  • Purchased: 0 time(s)
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Request Description
Solution Description
Well start with straight-line depreciation, as the double-declining balance is based upon it.  But there’s an important disclaimer here: we assume that we know the salvage value at the end? So it reduces the depreciable amount by $10,000.
More often real-world finance problems assume no salvage value? Because it’s so hard to predict.  Then tooling is depreciated over its expected life and any salvage value simply comes back in the last year.
And another disclaimer: the IRS has a half-year convention for equipment put in place? But since we are using the full-year in this problem, well ignore that too.