Installment method and the diminishing balance method

Assignment Help Finance Basics
Reference no: EM131066566

A Lorry is depreciated over a period of 7 years, with an initial cost of £65,000 and an estimated scrap value after 7 years of £2,000.The depreciation is calculated separately using two methods, the equal installment method and the diminishing balance method.

Calculate:

(a) using the equal installment method, the percentage of the initial cost to be written off each year.

(b) using the diminishing balance method, the rate of depreciation.

(c) the year in which the two methods give amounts of depreciation that are closest to each other.show your working.

Reference no: EM131066566

Questions Cloud

Cost of floating an equity issue : Consider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floating an equity issue. State Tru..
Create all not null constraints as indicated in the erd : Create all NOT NULL constraints as indicated in the ERD. Create all PK constraints as indicated in the ERD. Create all FK constraints as indicated in the ERD.
Cost of capital for bank overdraft : What is the cost of capital for bank overdraft (kbo). The overdraft rate is 7.6 % pa compounded 12 times a year? Answer as a percentage to two decimal places.
Preparation of a full project proposal : Assessment task requires the preparation of a full project proposal that should contain the following items: A detail statement of the problem that you would like to examine
Installment method and the diminishing balance method : A Lorry is depreciated over a period of 7 years, with an initial cost of £65,000 and an estimated scrap value after 7 years of £2,000.The depreciation is calculated separately using two methods, the equal installment method and the diminishing bal..
Test procedure that minimizes the sum of the probabilities : (a) for k = 4, determine the test procedure that minimizes the sum of the probabilities of type I and type II errors. (b) Determine the probability of type I error and the probability of type II error using the procedure in part (a), still using k ..
Calculate standard deviation of expected portfolio returns : Jamie Wong is considering building an investment portfolio containing two stocks, L and M. Stock L will represent 80% of the dollar value of the portfolio, and stock M will account for the other 20%. Calculate the expected value of portfolio returns,..
Legal liability of shareholders : Cathy says, "I don't have to buy a motor vehicle policy that insures against my legal liability for the property damage of the third party, because my company owns a product and liability insurance which insures against the legal liability of shar..
Write a summary for earned value management : Write a summary for Earned Value Management.

Reviews

Write a Review

Finance Basics Questions & Answers

  A a 10-year rm1000 par value bond pays an 8 coupon with

a a 10-year rm1000 par value bond pays an 8 coupon with quarterly payments during its first five years you receive rm20

  What is the book value of aca assets today

ACA Computer Systems's balance sheet lists net fixed asset as $32 million. The fixed assets could currently be sold for $28 million. ACA's current balance sheet shows current liabilities of $12 million and net working capital of $8 million. What i..

  Define the contemporary level of democratic institutionalism

Is it a logical outcome of the evolution of the U.S. constitutionalism or, rather, its unintended by-product?

  What is the operating leverage effect and what causes it

what is the operating leverage effect and what causes it? what are the potential benefits and negative consequences of

  What are the 5 factors of production

what are the 5 factors of production and why are they important?

  A firm is considering a project that is expected to cost

Suppose a firm is considering a project that is expected to cost $2,115,000 (= C). The project is expected to produce cash flows for four years. Cash flow in year 1 will be $647,000 (= CF1), cash flow in year 2 will be $738,000 (= CF2), cash f..

  What is the apy or effective rate on your investment

6) You have $7,500 in a 12 month Certificate of Deposit that pays 8% APR that compounds quarterly. What is the APY or effective rate on your investment?

  What is the incremental cash inflow from the proposed

The monthly interest rate is .2 percent and the variable cost per unit is $168. What is the incremental cash inflow from the proposed credit policy switch?

  Accurately defines the term compound growth

4. Which of the following accurately defines the term compound growth?  a. A fee paid for the use of another person's money

  What is the sk/sf cross rate

Bartman Corporation observes that the Swiss franc (SF) is being quoted at $0.6164/SF, while the Swedish krona (SK) is quoted at $0.1981/SK. What is the SK/SF cross rate?

  Inflows and revenue management

Inflows and Revenue Management

  What is her cash flow now

What will Ms. Browns cash flow be under the proposed capital structure of the firm? Assume that she keeps all 250 of her shares. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd