Sinking fund depreciation method in economical engineering, Other Engineering

Assignment Help:

Sinking Fund Depreciation Method

Prior to World War II little attention was given to depreciation, and some business actually established savings accounts in which uniform annual deposits were placed so that at the end of the useful life an asset could be replaced.

Given the costs basis or the amount paid for an asset P, the salvage value at the end of the useful life F, the useful life n years, and the depreciation account paid annual compound interest of I, then the annual deposit to the depreciation account is

D = (P - F) (A|F,i%,n)

=PMT(i%, n, -()P-F)

The depreciation method based on Equation 9.1 is called the sinking fund factor. The actual depreciation for year dt is the sum of the annual deposit and the accumulated interest for year t.

dt = d(F| P,i%,t-1)

=FV(i%, t-1, -PMT(i%, nn -(P-F)))

The undepreciated portion of an asset is called the book value Bt, which based on the sinking fund depreciation is given by

Bt =P -d(F|A,i%,t)

= P -FV(i%, t, -PMT(i%, n, , -(P-F))


Related Discussions:- Sinking fund depreciation method in economical engineering

What processes shape earth’s surface, Expertsmind.com brings you unique so...

Expertsmind.com brings you unique solution in physicsWhat processes shape Earth's surface? What processes shape Earth’s surface? -Impact craters: bowl-shaped cr

Validation, a web application using any technology that accepts an email ad...

a web application using any technology that accepts an email address and checks if the domain of the email address exists.

Finance, et C(K) denote a European vanilla Call option with strike price K....

et C(K) denote a European vanilla Call option with strike price K. Assume that all options are identical except for strike price, and strike prices satisfy (K1) What are the no-a

Estimate the energy loss from the pipe per meter , A 50 cm  diameter pipeli...

A 50 cm  diameter pipeline in the Arctic Carries hot oil at 30 0 C and exposed to a surrounding temperature of -20 0 C. Special powder insulation 5 cm thick surrounds the pipe an

Constant speeding propeller, Constant speeding propeller: The definitio...

Constant speeding propeller: The definition of a Constant Speeding propeller is 'A propeller, the pitch setting of which varies automatically to maintain a preselected constant

Paint, What are the ingredients of paint. Explain?

What are the ingredients of paint. Explain?

Assembly buildings - common fault, Assembly buildings - fire risk assessmen...

Assembly buildings - fire risk assessment: Common faults found in assembly buildings are: Combustible items left in protected routes or bedroom corridors Locked exi

Civil sit problems & its solution, two frames are not joint properly so cre...

two frames are not joint properly so create gap between two frames so material lick from this gap

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd