SOLUTION: An automobile purchased for 24,000 is depreciated using the straight line method over 5yrs. what will be the book valueat the end of yr 3? Assuming scrap value is $0.

Question 310808: An automobile purchased for 24,000 is depreciated using the straight line method over 5yrs. what will be the book valueat the end of yr 3? Assuming scrap value is $0.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
An automobile purchased for 24,000 is depreciated using the straight line method over 5yrs. what will be the book value at the end of yr 3? Assuming scrap value is $0.
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You have two points relating value and time:
(0, 20,000) and (5,0)
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slope = (0-20,000)/(5-0) = -4000
intercept = 20,000
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Equation:
V(t) = -4000t + 20,000
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V(3) = -4000*3 + 20,000
V(3) = $8000
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Cheers,
Stan H.
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