Response to the following problem:
Cisco Systems is purchasing a new bar code-scanning device for its service center in San Francisco. The table that on the right lists the relevant cost items for this purchase. The operating expenses for the new system are $8,000/year, and the useful life of the system is expected to be 4 years. The SV for depreciation purposes is equal to 22?% of the hardware cost.
Costs
Hardware $150,000
Training $13,000
Installation $16,000
A. What is the book value of the device at the end of year two if the SL depreciation method is used?
B. Suppose that after depreciating the device for 1 year with the SL method, the firm decides to switch to the double declining balance depreciation method for the remainder of the? device's life? (the remaining 3 years). What is the device's BV at the end of 2 years?