A mid-sized business will purchase some new office furniture and equipment. It will cost 600,000. For internal purposes it will depreciate the equipment using 150% declining balance (normal declining balance with 1.5 instead of 1 in the numerator) over a period of 6 years. Its estimated Salvage Value will be 20,000.
(a) Show the depreciation in each year and the book value in each year using 150% declining balance Depreciation.
(b) Repeat the calculation using a rate such that in 6 years the book value will equal the estimated Salvage value.