An 8-year recovery-period conveyor system for grading eggs is planned for DDB depreciation. The system had a

Question:

An 8-year recovery-period conveyor system for grading eggs is planned for DDB depreciation. The system had a first cost of $30,000 with a $9000 salvage value. The annual operating cost allocated to the conveyor is $7000 per year. The book value at the end of year 2 is nearest to:

(a) $7560

(b) $11,812

(d) $14,300

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...

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