Question: Pneumatics Engineering purchased a machine that had a first cost of $40,000, an expected useful life of 8 years, a recovery period of 10 years,

Pneumatics Engineering purchased a machine that had a first cost of $40,000, an expected useful life of 8 years, a recovery period of 10 years, and a of $10,000. The operating cost of the machine is expected to be $15,000 per year. The inflation rate is 6% per year and the company's is 11% per year. Determine
(a) The depreciation charge for year 3,
(b) The present worth of the third-year depreciation charge in year 0, the time of asset purchase,
(c) The book value for year 3 according to the straight line method.

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