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Exercise 2) Depreciation:The following data for a machinery is available: Purchase price (incl. 20%VAT) 360 000 EUR Salvage value (excl VAT) 10 000 EUR useful life 7 years (=estimated service life) production capacity 580 000 hours 1st year: production (2006) 120 000 hours 2nd year: production (2007) 160 000 hours 3rd year: production (2008) 130 000 hours 4th year: production (2009) 80 000 hours 5th year: production (2010) 50 000 hours 6th year: production (2011) 40 000 hours 7th year: production (2012) 30 000 hours a) Calculate the straight-line depreciation. (straight-line method) b) Calculate the depreciation based on the activity method. c) What other depreciation methods do you know? d) Calculate the depreciation for 2006 and the book value (31.12.2006) in accordance with the Austrian (taxation) regulations (straight-line) if the machinery has been purchased at 30 May 2006. e) Calculate the depreciation for 2006 and the book value (31.12.2006) in accordance with the Austrian (taxation) regulations (straight line) if the machinery has been purchased at 5 August 2006.
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