A new machine was purchased by NF Engineering for RM155,000 with an estimated salvage value of RM30,000
Question:
A new machine was purchased by NF Engineering for RM155,000 with an estimated salvage value of RM30,000 after 5 years. When it was delivered, NF paid freight charges of RM3,000 and handling fees of RM1,500. Site preparation and installation of the machine cost RM5,500.
(a) Determine the cost basis for this machine.
(b) Using straight line method, calculate
(1) Depreciation expense per year
(ii) Total depreciation at the end of year 3
(iii) How much can the machine be sold in year 3
(c) Using double declining balance method, determine
(1) Depreciation expense per year
(ii) Total depreciation at the end of year 3
(iii) How much can the machine be sold in year 3.
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling