A machine cost 15 000 if it depreciated in value by 15% per annum, find its value at the end of two years

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A machine cost 15 000 if it depreciated in value by 15% per annum, find its value at the end of two years

[From: ] [author: ] [Date: 12-02-03] [Hit: ]

if you want to do the compound method, the residual value is 15,000 x 0.85 x 0.85 = 10,837.......

need some help i don't really get it i keep getting the wrong answer

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Straight line depreciation is simply 2 x 15% = 30%
15,000 less 30% = 15,000 x 0.7 = 10,500

NOTE: Depreciation is typically straight line rather than compound. However, if you want to do the compound method, the residual value is 15,000 x 0.85 x 0.85 = 10,837.5 You will notice that straight line depreciation is quicker, which is why it is used.

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I'll give you €200 for it now no questions asked. If it's a proper awesome machine I might stretch to €250 but I need pictures.

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15 000(.85)^2 = $10,837.5

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Get 15%, then 15% of that. Then subtract that from the first. You get, 10837.50

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