Calculate Actual Cash Value. A table set you received 20 years ago was worth $5,580 and...

Calculate Actual Cash Value.

A table set you received 20 years ago was worth $5,580 and has a projected life of 60 years. Today's value of the set is $11.381. Determjne the Actual Cash Value and Depreciation of the table set. Show work! I need to leane how to calculate depreciation and Actual Cash Value.

Solutions

Expert Solution

Projected life of table set = 60 years

Life of table set completed = 20 years

Replacement cost of table set = $11,381

Depreciation is the loss in value of the table set over 20 years

Using straight line method, Depreciation = Replacement Cost X Life of Table Set Completed / Total Life of Table Set

= 11381 X 20 / 60 = $3,793.67

Actual cash value is computed by subtracting depreciation from replacement cost.

Actual Cash Value = Replacement Cost - Depreciation

= 11381 - 3793.67 = $7,587.33

jeff jeffy answered 2 years ago

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