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In: Economics

Please solve by hand A luxury limo car company has a 2-year-old car with a current...

Please solve by hand

A luxury limo car company has a 2-year-old car with a current book value of $98,000. The company’s uses Declining Balance method to calculate book depreciation with a rate of 30%.

A] What was the original price of the car?

B] What will be its book value 3 years from now?

C] If the company decided to use the straight-line depreciation method form now on, knowing that the salvage value 5 years from now is zero. What’s the book value 3 years from now?

Note: The half-year rule only applies to tax depreciation (not in this question).

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Expert Solution

Rahul Sunny answered 1 year ago
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