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    Smarrtz's Avatar
    Smarrtz Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Nov 9, 2009, 07:48 AM
    Calculating depreciation
    I would like to know how answer ths question including how to use the formula. :)
    A company intends to purchase a new piece of machinery
    For $ 250, 000 that will depreciate by 6% half year after purchase. What will the machine be worth 5 years after purchase?
    haider78605's Avatar
    haider78605 Posts: 61, Reputation: 1
    Junior Member
    		  
    #2

    Nov 9, 2009, 01:43 PM


    This is not the answer I just want to know these details so I can answer this question for you and will explain it to you as well

    I want to know that you said 6% half year after purchase it means that the machine is being purchased in the mid of the year and yearly depreciation is 12 %? If I am right then tell me I will solve it for you completely... One more thing which I would like to know is that you said 5 years after purchase it means that half year and then 5 years total 5.5 years am I right?
    Smarrtz's Avatar
    Smarrtz Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Nov 10, 2009, 01:06 AM
    Oh.. sorry. I meant to say 6% per half year
    haider78605's Avatar
    haider78605 Posts: 61, Reputation: 1
    Junior Member
    		  
    #4

    Nov 10, 2009, 03:55 AM
    smartz depreciation.xls
    This method will be the diminishing balance method .



    I have calculate for 2 years so you can learn how to do it now you can calculate it for the rest of the three years . So then you will learn and can do it well in your exams.. :)

    If you need anyfurther help feel free to ask
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