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Exactly 10 years ago, Boyditch Professional Asso- ciates purchased $100,000 in depreciable assets with an estimated salvage of $10,000. For tax depreciation the SL method with n = 10 years was used, but for book depreciation, Boyditch applied the DDB method with n = 7 years and neglected the salvage estimate. The company sold the assets today for $12,500.
(a) Compare this amount with the book values using the SL and DDB methods.
(b) If the salvage of $12,500 had been estimated exactly 10 years ago, determine the depreciation for each method in year 10.
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