Problem
Textbook: Engineering Economic Analysis, Third Canadian Edition. D. Newnan, J. Whittaker, T. Eschenbach, J. Lavelle. Oxford University Press. Provide all the formulas used and an example of how to use them, in case of solving part of the problem with Excel. If necessary, please check the official CRA website.
A business equipment used for the manufacture of commercial goods can be purchased for $30,000. This asset is expected to be sold after 4 years for $6,000. Compute the depreciation amounts every year (depreciation schedule) during the useful life of this asset. Refer to a current tax regulations1 for CCA rates. Please attempt using the following methods:
[a] Straight-line (SL) method (Book Depreciation) [
b] Double-declining-balance (DDB) method (Book Depreciation)
[c] DDB switching to SL method (Book Depreciation)
[d] CCA depreciation as a class 8 asset (Tax Depreciation)
Hint: Do not depreciate below salvage value for methods [a], [b], and [c]. You may depreciate below salvage value for method [d] and [e] if it is necessary. Please note that the half-year rule applies by default to Tax Depreciation.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.