Subject: Second assignment in Engineering Economy

Date: $11/04/2024$

First academic year $1446/1447$

Examination Committee: Prof. Khaled Abuhasel

$($Answer the following questions$)$

Q$1.$ Smith, Jones, and Rodriguez are an engineering design firm considering the purchase and installation of a network of computer workstations for $$170,000.$ The expected life of the system is $12$ years, when it will have a salvage value of $$20,000.$ Using straight$-$line depreciation, calculates the annual depreciation and book values of the laser at years $4$ and $8.$

Q$2.$ Use the Sum$-$ of $-$Years Digit $($SOYD$)$ and $200\%$ DB depreciation methods to calculate the depreciation amount and BV at the end of third year of life for a firm that has purchased $$150,000$ worth of office equipment that qualifies as depreciable property. This office furniture is estimated to have a salvage value of of the original cost$)$ after the end of its ten years of useful life.

Q$3.$ A universal lathe machine tool is to be depreciated as a linear function of use $($units$-$of$-$production method$).$ It costs $$160,000$ and is expected to machine $400,000$ workpieces and then be sold for $$10,000.$ Up to the end of the third year, it had produced $90,000$ workpieces, and during the fourth year it produced $40,000$ units. What is the depreciation deduction for the fourth year and the BV at the end of the fourth year?