Answer to Question #273941 in Civil and Environmental Engineering for Alan Enrico V Tuib

Question #273941

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.

Expert's answer

It asks about the depreciation for the 3rd year,

The changes in depreciation for 5 years would be as: 20%, 32%, 19.2%, 11.52% and 5.76%

The change in 3rd year is of 19.2% because of which depreciation would be 19.2% of 284,000 = $54528

"(a)D \n2\n\u200b\t\n =80,000(0.32)= \\$\n25\n,\n600"

"(b)BV \n2\n\u200b\t\n =80,000\u201380,000(0.20+0.32)"


"= \\$\n38\n,\n400"

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