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    Santos ECO Fin HW02

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    deanyangg25
    This document provides directions for a final homework assignment on engineering economics. It includes 4 questions calculating depreciation using straight-line depreciation. Question 1 requires creating a depreciation table for an asset over 7 years. Question 2 calculates annual depreciation and book value after 10 years. Question 3 finds total depreciation and book value after 5 years. Question 4 determines depreciation charge for 3 years, depreciation reserve after 3 years, and book value after 3 years for delivery jeeps.

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    Santos ECO Fin HW02

    Uploaded by

    deanyangg25
    134 views4 pages
    This document provides directions for a final homework assignment on engineering economics. It includes 4 questions calculating depreciation using straight-line depreciation. Question 1 requires creating a depreciation table for an asset over 7 years. Question 2 calculates annual depreciation and book value after 10 years. Question 3 finds total depreciation and book value after 5 years. Question 4 determines depreciation charge for 3 years, depreciation reserve after 3 years, and book value after 3 years for delivery jeeps.

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    This document provides directions for a final homework assignment on engineering economics. It includes 4 questions calculating depreciation using straight-line depreciation. Question 1 requires creating a depreciation table for an asset over 7 years. Question 2 calculates annual depreciation and book value after 10 years. Question 3 finds total depreciation and book value after 5 years. Question 4 determines depreciation charge for 3 years, depreciation reserve after 3 years, and book value after 3 years for delivery jeeps.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    134 views4 pages

    Santos ECO Fin HW02

    Uploaded by

    deanyangg25
    This document provides directions for a final homework assignment on engineering economics. It includes 4 questions calculating depreciation using straight-line depreciation. Question 1 requires creating a depreciation table for an asset over 7 years. Question 2 calculates annual depreciation and book value after 10 years. Question 3 finds total depreciation and book value after 5 years. Question 4 determines depreciation charge for 3 years, depreciation reserve after 3 years, and book value after 3 years for delivery jeeps.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    TCCB 421 - ENGINEERING ECONOMICS

    Final Homework 01
    Directions:
    a) Solve the following questions
    b) Filename format: Surname_ECO_Fin_HW01
    b) Submit in PDF format as one file.
    Questions:

    1. Prepare a depreciation table for an asset which was bought at Php15,000 and useful for

    a period of 7 years. Estimated salvage value is 10% of its original cost.

    Given:

    𝑉 = 15 000 𝑛=7 𝑉𝑠 = 0. 1 * 15 000 = 1500

    Solution:

    𝑉−𝑉𝑠 15000 − 1500 𝑑 = 1928. 57


    𝑑= 𝑑= 7
    𝑛

    TABLE:

    Year Value Depreciation Total Value at the end


    During Depreciation of Year

    1 15 000 1928.57 1928.57 13 071.43

    2 13 071.43 1928.57 3857.14 11 142.86

    3 11 142.86 1928.57 5785.71 9214.29

    4 9214.29 1928.57 7714.28 7285.72

    5 7285.72 1928.57 9642.85 5357.15

    6 5357.15 1928.57 11571.42 3428.58

    7 3428.58 1928.57 13499.99 1500.01


    2. Equipment bought for Php60,000 is expected to last for 30 years. If the book value after

    20 years is Php20,000, how much is the depreciation each year? Find the book value

    after 10 years.

    Given:

    𝑉 = 60 000 𝑛 = 30 𝑉20 = 20 000

    Solution:

    𝑉𝑎 = 𝑉 − 𝑎𝑑 @𝑛 = 10

    20 000 = 60 000 − 20𝑑 𝑉10 = 60 000 − 10(2000)

    20𝑑 = 60 000 − 20 000 𝑉10 = 60 000 − 20 000

    40 000
    𝑑= 20 𝑉10 = 40 000

    𝑑 = 2000
    3. A machine which costs Php10,000 was sold as scrap after being used for 10 years. If the

    scrap value was Php500, determine the total depreciation and book value at the end of

    the 5th year.

    Given:

    𝑉 = 10 000 𝑉𝑠 = 500 𝑛 = 10

    Solution:

    𝑉−𝑉𝑠 𝑉𝑎 = 𝑉 − 𝑎𝑑
    𝑑= 𝑛

    10 000− 500 𝑉5 = 10 000 − (5)(950)


    𝑑= 10

    9 500
    𝑉5 = 10 000 − 4750
    𝑑= 10

    𝑉5 = 5 250
    𝑑 = 950
    4. Delivery jeeps purchased by KH Company cost Php180,000 each. Past records indicate

    that jeeps should have an economic life of 10 years. They can be sold from an average of

    Php50,000 each year after 10 years of use. The company receives 9% interest on

    investment funds. Using straight line method: Determine:

    a. the depreciation charge during 3 years

    b. the depreciation reserve accumulated at the end of 3 years

    c. book value at the end of 3 years.


    Given:
    𝑉 = 180 000 𝑉𝑠 = 50 000 𝑖 = 0. 09

    𝑛 = 10
    Solution:
    a. the depreciation charge during 3 years
    𝑉−𝑉𝑠
    𝑑= 𝑛

    180 000−50 000


    𝑑= 10

    𝑑 = 7000
    b. the depreciation reserve accumulated at the end of 3 years

    𝐷= 𝑑*𝑎

    𝐷 = 7000 * 3

    𝐷 = 21 000

    c. book value at the end of 3 years.

    𝑉𝑎 = 𝑉 − 𝑎𝑑

    𝑉3 = 180 000 − (3)(7000)

    𝑉3 = 159 000

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