Respuesta :
Answer: The current book value of an equipment purchased three years ago is $6983.925 .
There are two ways to solve this question.
Method 1
In this method, we compute the depreciation for each of the three years and deduct the total depreciation calculated from the purchase value of the equipment to arrive at the book value of the equipment.
Equipment Value: $94,250
Year MARCS Depreciation Rate Depreciation
1 0.3333 [tex]94250*0.3333 = 31413.525[/tex]
2 0.4445 [tex]94250*0.4445 = 41894.125 [/tex]
3 0.1481 [tex]94250*0.1481 = 13958.425 [/tex]
Total 87266.075
Value at the end of year 3 is $94,250 - 87266.075 = 6983.925
Method 2
In this method, we add up the depreciation rates and deduct from 1. We then find the product of this number and the cost of the equipment to arrive at the current book value.
[tex]Current Book Value = [1 - (0.3333+0.4445+0.1481)]*94250[/tex]
[tex]Current Book Value = [1 - (0.9259)]*94250[/tex]
[tex]Current Book Value = [0.0741]*94250[/tex]
[tex]\mathbf{Current Book Value = 6983.925 }[/tex]
