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    Assignment 7

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    Alex
    This document contains details of an assignment for an engineering course. It includes 12 multiple choice questions related to topics like depreciation, inflation, indexes, and rates of return. Students must submit their answers online by November 27, 2015 at 23:59. No late submissions will be accepted.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Assignment 7

    Uploaded by

    Alex
    311 views2 pages
    This document contains details of an assignment for an engineering course. It includes 12 multiple choice questions related to topics like depreciation, inflation, indexes, and rates of return. Students must submit their answers online by November 27, 2015 at 23:59. No late submissions will be accepted.

    Original Description:

    ENGR 301

    Original Title

    Assignment 7

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    This document contains details of an assignment for an engineering course. It includes 12 multiple choice questions related to topics like depreciation, inflation, indexes, and rates of return. Students must submit their answers online by November 27, 2015 at 23:59. No late submissions will be accepted.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    311 views2 pages

    Assignment 7

    Uploaded by

    Alex
    This document contains details of an assignment for an engineering course. It includes 12 multiple choice questions related to topics like depreciation, inflation, indexes, and rates of return. Students must submit their answers online by November 27, 2015 at 23:59. No late submissions will be accepted.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    ENGR 301 - Assignment 7

    Deadline: 23:59, Friday November 27, 2015


    Assignments must be submitted online using the multiple choice answer sheet on
    the Moodle course website. No submissions will be accepted after the deadline.

    Question 7-1
    Some special handling devices can be bought for $12,000. At the end of 4 years they can be sold for
    $3,500. The book value of the assets after 3 years of depreciation using SOYD is close to:
    $4510

    $4180

    $4420

    $4350

    Question 7-2
    Manufacturing equipment was acquired for $12,000. The book value of this equipment after 3 years of
    depreciation using declining balance with a rate of 30% is close to:
    $5880

    $4998

    $7140

    $4116

    Questions 7-3 to 7-7


    The depreciation schedule for certain equipment has been arrived at by various methods. The estimated
    salvage value of the equipment at the end of its 7 year useful life is $700. Identify the resulting
    depreciation schedules.
    Year
    1
    2
    3
    4
    5
    6
    7

    A
    $1,329
    $1,329
    $1,329
    $1,329
    $1,329
    $1,329
    $1,329

    B
    $2,325
    $1,993
    $1,661
    $1,329
    $ 996
    $ 664
    $ 332

    C
    $2,857
    $2,041
    $1,458
    $1,041
    $ 744
    $ 531
    S 379

    D
    $3,161
    $2,162
    $1,478
    $1,011
    $ 692
    $ 473
    $ 323

    Question 7-3: Which scheme represents SOYD depreciation?

    Question 7-4: Which scheme represents DB depreciation?

    Question 7-5: The DB depreciation rate is close to?

    25% 28% 32% 30%

    Question 7-6: Which scheme represents SL depreciation?

    Question 7-7: Which scheme represents DDB depreciation?

    Question 7-8
    Manufacturing equipment was acquired for $12,000. Determine the undepreciated capital cost of this
    equipment after 3 years of depreciation using CCA depreciation as a Class 43 asset.
    (Hint: Use the CCA classes and rates posted on the course website)
    $5880

    $4998

    $7140

    $4116

    Question 7-9
    On July 1, 2010 Sarah paid $100,000 for a greenhouse and an additional $50,000 for the land on which
    the greenhouse stands. Compute the UCC at the end of year 2.
    (Hint: Use the CCA classes and rates posted on the course website)
    $100,200

    $79,700

    $85,500

    $92,400

    Question 7-10
    Ten years ago a machine cost $800,000. Now, the same machine costs $1,200,000. Calculate the average
    rate of inflation per year.
    3.7%

    5.0%

    4.1%

    4.6%

    Question 7-11
    An investor bought a tax-free provincial bond, at a cost of $1000 which will pay $50 interest each year for
    20 years. The bond will mature in 20 years and return the original $1000. If there is a 2% annual inflation
    during this period, what real rate of return will the investor receive?
    2.9%

    2.5%

    3.2%

    4.0%

    Question 7-12
    A composite price index for the cost of vegetarian foods called eggs, artichokes, and tofu (EAT) was 330
    ten years ago and has averaged an annual increase of 12% since. Calculate the current value of the index.
    480

    618

    877

    1025

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