In: Economics
A machine that cost SAR 320,000 is owned by a cement factory.
Salvage is estimated at SAR 75,000.
Compare book values for MACRS, DB (20%), DDB and standard SL
depreciation over a 7-year recovery
period.
SL depreciation expense per year = $ 35,000
The book value of the machine over the useful life of the asset is calculated as follows
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Double declining rate = 40%
Double declining balance depreciation method | ||||
Year | Book value at the beginning of the year | Depreciation rate per year | Depreciation | Book value at the end of the year |
1 | 320000 | 40.00% | 128000 | 192,000 |
2 | 192,000 | 40.00% | 76800 | 115,200 |
3 | 115,200 | 40.00% | 46080 | 69,120 |