George Washington Hospital a for profit hospital wants to increase efficiency of GWH data processing operations. She
Question:
George Washington Hospital a for profit hospital wants to increase efficiency of GWH data processing operations. She decides to acquire a computer system that would reduce the hospital collection by five days among other benefits. The computer system cost $2,700,000 and spent $241,175 to renovate a building to accommodate the new equipment. The useful life of the computer system is estimated to be eight years and the computer residual value is $100,000.00.
Using straight line depreciation method. Calculate GWH yearly depreciation on that equipment. What would be the book value after year 5?
Using Modified Accelerated Cost Recovery System (MACRS) method. What is year 3 depreciation expense? What is year 4 accumulated depreciation? What would be the book value after year 4?
Using Double Declining Depreciation method. What is year 3 depreciation expense? What is year 4 accumulated depreciation? What would be the book value after year 4?
Fundamentals of Corporate Finance
ISBN: 978-0078034640
7th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus