In: Finance
Solution :-
Dep Per year as per SOYD method
Year | Dep Share | Cost | Dep Charge |
1 | 4/10 | 105,700 | 42,280 |
2 | 3/10 | 105,700 | 31,710 |
3 | 2/10 | 105,700 | 21,140 |
4 | 1/10 | 105,700 | 10,570 |
10 | 105700 |
Dep per year as per straight line method = $105,700 / 4 = $ 26,425
Choose the method of Straight line as with this method the NPV is higher