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Participants Manual
Depreciation Methods
Straight Line Method Double Declining Method Sum of Year Digits
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Participants Manual
Example
Your company bought a new equipment with Life time =5 years, Initial cost =5,000 ,Salvage value =1,000 .Find the equipment value throughout the life period.
Year 0 1 2 3 4 5
Initial Cost
Salvage Value
5
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Participants Manual
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Example
Your company bought a new equipment with Life time = 5 years, Initial cost = 5,000 ,Salvage value = 1,000. Find the equipment value throughout the life period.
Depreciation Formula 0 (2/5) (5,000-0) (2/5) (5,000-2,000) (2/5) (5,000-3,200) (2/5) (5,000-3,920) (2/5) (5,000-4,352) Depreciation Amount 0 2000 1200 720 432 259.2 Equipment Value 5000 3000 1800 1080 648 388.8 Final Depreciation Amount 0 2000 1200 720 80 0 Final Equipment Value 5000 3000 1800 1080 1000 1000
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Year 0 1 2 3 4 5
Participants Manual
Salvage Value
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Participants Manual
Example
Your company bought a new equipment with Life time = 5 years, Initial cost = 5,000, Salvage value =1,000. Find the equipment value throughout the life period.
Year 0 1 2 3 4 5
Depreciation Formula 0 (5/15) (5,000-1,000) (4/15) (5,000-1,000) (3/15) (5,000-1,000) (2/15) (5,000-1,000) (1/15) (5,000-1,000)
Depreciation Equipment Amount Value 0 5,000 1333 3,667 1067 2,600 800 1,800 533 1,267 267 1,000
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Initial Cost
Salvage Value
3000 2000 1000 0 0 1 2 3 4 5
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Participants Manual
Salvage Value
Initial Cost
5
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