A factory expansion plans on having equipment costs of $300 million with an expected salvage value for the equipment after 10 years to be 10% of the equipment purchase price; however, this state has added a caveat that forces the company to sell equipment to the state for a dollar when the company disposes of the equipment after 10 years.

Am I able to just take that 10% of the equipment purchase price and put that at the end of 10 years or do I need to factor that through each of the years?

Answer rating: 100% (QA)

No you cannot just take that 10 of the equipment purchase price and put that at the end of 10 years ... View the full answer