Solve the following problems on replacement analysis, comparing alternatives and depreciation. Please solve the problem Manually.

An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis

is 60,000, and it has an estimated MV of 12,000 at the end of an estimated useful life of 14 years.

Compute the depreciation amount in the third year and the BV at the end of the fth year of life by each of

these methods:

a. The SL method.

b. The 200% DB method with switch over to SL.

c. The GDS.