<PRE><B>Question 310808</B>
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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