Using the double declining balance method for depreciation

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1) The Big Deal Company has purchased new furniture for their offices at a retail price of $100,000. An additional $20,000 has been charged for insurance, shipping and handling. The company expects to use the furniture for 8 years (useful life = 8 years) and then sell it at a salvage (market) value of $10,000. Using the Double Declining Balance method for depreciation , what is the depreciation in the second year?

2) A second hand bulldozer acquired at the beginning of the fiscal year at a cost of $68,000 has an estimated salvage value of $9,500 and an estimated useful life of 12 years. What is the amount of annual depreciation using straight line depreciation?

3) A young woman engineer decides to save towards her retirement fund that pays 8% interest compounded quarterly (the market interest rate). She feels that $600,000 worth of purchasing power in today's dollars will be adequate to see her though her sunset years forty years from now. Assume the inflation rate will be 6%, what should be her quarterly payments in actual dollars?

Reference no: EM131187888

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