the following data are available for a foundry operation started as a new company four years ago when the construction cost index was 125
current liabilities $170000
operating income $176200
NBV long term assets (end year 3) $687500
current assets $300000
GROSS BOOK VALUE $1100000
estimated total useful life 8 years
Age of assets 4 years
construction cost index end of year 4 150
of long term assets at historical cost
what is the current cost annual depreciation in year 4 dollars?
1-$440000
2-$240000
3-$165000
4-$295000
5-$148700
Answer:
Current Cost Annual Depreciation in year 4
= 3-$165000
Net Book Value of Long term assets as per cost index at the end of year 4
= $687500*150/125
= $825000
Remaining useful life = 5 years
Therefore current cost annual depreciation = $825000/5 = $165000.
the following data are available for a foundry operation started as a new company four years...
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