7. A cooling-water pumping station at the LCRA plant costs $600,000 to construct, and it is...

 

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7. A cooling-water pumping station at the LCRA plant costs $600,000 to construct, and it is projected to have a 25-year life with an estimated salvage value of 15% of the construction cost. However, the station will be book-depreciated to zero over a recovery period of 30 years. Calculate the annual depreciation charge for years 4, 10, and 25, using (a) Straight line depreciation and (b) DDB depreciation (c) What is the implied salvage value for DDB? 7. A cooling-water pumping station at the LCRA plant costs $600,000 to construct, and it is projected to have a 25-year life with an estimated salvage value of 15% of the construction cost. However, the station will be book-depreciated to zero over a recovery period of 30 years. Calculate the annual depreciation charge for years 4, 10, and 25, using (a) Straight line depreciation and (b) DDB depreciation (c) What is the implied salvage value for DDB?

Answer rating: 100% (QA)

C solution is Salvage value 90000 Book value at the beginning of the 600000 600000 Original Cost Sal... View the full answer