Homework Answers
d = 2 / n = 2 / 5 = 0.4
Depreciation in first year = 0.4 * 38000 = 15200
BV at the end of year 1 = 38000 - 15200 = 22800
Dep in year 2 = 22800 * 0.4 = 9120
BV at the end of yr 2 = 22800 - 9120 = 13680
Diff in Book value and trade in value = 13680 - 5000 = 8680
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