Determine how sensitive the decision to invest in the system is to the estimates of The RX Drug Company has just purchased a capsulating machine for $76,000. The plant engineer estimates the machine has a useful life of 5 years and little or no salvage value. He will use zero salvage value in the computations. Compute the depreciation schedule for the machine using: (a) Straight-line depreciation. (b) Sum-of-years'-digits depreciation. (c) Double declining balance depreciation.
A loan of $10,000 is to be repaid over a period of eight years. During the first four years, exactly half of the loan principal is to be repaid (along with accumulated compound interest) by a uniform series of payments of A1 dollar per year. The other half of the loan principal is to be repaid over four years, with accumulated interest, by a uniform series of payments of A2 dollar per year, If i=9% per year, what are A1 and A2?
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