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ʎddɐɥ ʎddɐɥ
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7 years ago
Lakeshore Fence Company purchased a new table saw for a total installed cost of $75,000. The table saw will be depreciated using the straight-line depreciation method. The controller of the company is having trouble deciding on an estimated useful life and an estimated residual value for the asset. The alternatives are:
1.   A ten-year estimated useful life with a $10,000 estimated residual value.
2.   A nine-year estimated useful life with a $15,000 estimated residual value.
3.   An eight-year estimated useful life with a $25,000 estimated residual value.

REQUIRED:
a.   Calculate the yearly depreciation expense for the new table saw under each of the alternatives given.
b.   Which of the three alternatives will result in the lowest yearly net income? Which of the three alternatives will result in the highest yearly net income?
c.   What should be the deciding factor in selecting among the three alternatives?
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hol23hol23
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7 years ago
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ʎddɐɥ Author
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Good timing, thanks!
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