Economy HW 5 Old
Economy HW 5 Old
College of Engineering
GENG 360: Engineering Economy
Fall 2009
Assignment 5
Due Date: Jan. 4, 2009 (MON.) at 12:00 PM – Submit to Eng. “M. Abu-Nada’s” Mailbox
1. Air handling equipment that costs $12,000 has a life of 8 years with a $2000
salvage value. (a) Calculate the straight line depreciation amount for each year. (b)
Determine the book value after 3 years. (c)What is the rate of depreciation?
(16.11)
2. New equipment to read 96-bit product codes that are replacing old bar codes is to
be purchased by General Food Stores. As a trial, 1000 of the items will be initially
purchased. The DDB method will be used to depreciate the total amount of
$50,000 over a 3-year recovery period. Calculate the accumulated depreciation
and book value curves (a) by hand and (b) by computer (and plot the results).
(16.17)
Here Taxes = (CFBT – depr)(tax rate). Use NPV function for PW of taxes.
Select the SL method with n = 5 years since it has the lower PW of tax.
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