Estimate the total useful life of the plant and equipment

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Reference no: EM13900332

Micron Technology, Inc., is in the semiconductor industry. This industry requires extensive capital investments in fabrication facilities in order to maintain technological competitiveness.

E. I. De Nemours DuPont & Co. is one of the leading chemical companies in the world. DuPont requires significant investment in chemical processing facilities. Chemical products have longer lives than do semiconductor products. The following selected fixed asset information is provided from recent financial statements (all numbers in millions):

	Plant and EquipmentInitial Cost	Accumulated Depreciation	DepreciationExpense
Micron Technology	$ 8,998	$ 4,836	$1,158
DuPont	22,661	14,257	1,355

a. Determine the book value of the plant and equipment for each company.

b. Estimate the total useful life of the plant and equipment, assuming straight-line depreciation and no residual value.

c. Estimate the percent of accumulated depreciation to the total initial cost of property, plant, and equipment for each company. Round to one decimal place.

d. Interpret the differences between Micron and DuPont from your calculations in (b) and (c).

Reference no: EM13900332

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