Question #266853

A company just purchased an intelligent robot, which has a first cost of $80,000. Since the robot is unique in its capabilities, the company expects to be able to sell it in 4 years for $95,000. (a) If the company spends $10,000 per year in maintenance and operation of the robot, what will the company’s MACRS depreciation charge be in year 2? Assume the recovery period for robots is 5 years and the company’s MARR is 16% per year when the inflation rate is 9% per year. (b) Determine the book value of the robot at the end of year 2.  


1
Expert's answer
2021-11-17T03:18:01-0500

(a)D2=80,000(0.32)=$25,600(a)D 2 ​ =80,000(0.32)= \$ 25 , 600



(b)BV2=80,00080,000(0.20+0.32)(b)BV 2 ​ =80,000–80,000(0.20+0.32)

=80,00041,600=80,000–41,600

=$38,400= \$ 38 , 400


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