Engineering Economic Analysis

.- -- -, - - - - -_. Problems 333 land, an earthen embankment can be constructed. The height of tlIe embankment will be determ ...

334 UNCERTAINTYINFUTURE EVENTS - (a)What is the expected PW for deciding whether to prQceed? (b)Find the P(loss) and the standar ...

r I Problems 10-34 A firm is choosing a new product. The following table summaIjzes six new potential products. Con- sidering ex ...

.0_."'" After Completing This Chapter... The student should be able to: · Describe depreciation, deterioration, and obsolescence ...

{I Depreciation Is Baseball Going Broke? In 2001, major league baseball brought in record revenues totaling over $3.5 billion. G ...

Unit-of-Production Depreciation We have so far dealt with a variety of economic analysis problems and many techniques for their ...

..... Basic Aspects of Depreciation 339 value to the owner, accountants define depreciation as allocating an asset's cost over i ...

'-'. .......... Straight-Line Depreciation Consider the costs that are incurred by a local pizza business. Identify each cost as ...

--- --- r Basic Aspects of Depreciation 341 capital improvements, and leased property. The leased property exception highlights ...

--... -._- Sum-of-Years'-Digits Depreciation r Equation 11-1 shows that year-to-year depreciation charges reduce an asset's bo ...

Historical Depreciation Methods 343 I:"~.:~ l.\~\ '~- ~.~ Consider the following: Cost of the asset,B Depreciable life, in years ...

344 DEPRECIATION The straight-line (SL) method is often used for intangible property. Veronica's finn bought a patent in April t ...

Historical Depreciation Methods 345 Thus, dl= 5 - 1 + 1(900 _ 70) = 277 15 5-2+1 d2= (900 - 70) = 221 15 d3= 5 - 3 + 1 (900 _ 70 ...

--~-- - -- ~.- '" - ~ - - 346 DEPRECIATION Declining Balance Depreciation Declining balance depreciation applies aconstant ...

Modified Accelerated Cost Recovery System (MACRS) 347 FIGURE 1\-4 Decliningbalance depreciation. $900 .B Declining Balance Depre ...

.- -- -."-"."... 348 DEPRECIATION depreciation.Thus it is muchless economicallyattractive.Underlaw,ADSmustbe used for (1) ...

Once the MACRS property class is known, as well as the placed-in-service date and cost basis, the year-to-year depreciation dedu ...

-. -._- 350 DEPRECIATION TABLE11-2 MACRSCDS Property Classes Property Class Personal Property (all property except real es ...

Modified Accelerated Cost Recovery System (MACRS) 351 TABLE 11-3 MACRS Depreciation for Personal Property: Half-Year Convention ...

*The useful life is 39 years for nonresidential real property. Depreciation is straight line using the midmonth convention. Thu ...