An old machine was purchased 3 years ago at a cost of ₱50,000. It was estimated to have a useful life of 8 years, with a salvage value of ₱5,000. It is now going to be replaced by a new machine costing ₱70,000 and ₱30,000 trade-in will be allowed for the old machine. Determine the sunk cost if depreciation has been computed by the (a) straight line method, (b) sinking fund method at 16% and (c) SOYD method'.
An old machine was purchased 3 years ago at a cost of ₱50,000. It was estimated to have a useful life of 8 years, with a salvage value of ₱5,000. It is now going to be replaced by a new machine costing ₱70,000 and ₱30,000 trade-in will be allowed for the old machine. Determine the sunk cost if depreciation has been computed by the (a) straight line method, (b) sinking fund method at 16% and (c) SOYD method'.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An old machine was purchased 3 years ago at a cost of ₱50,000. It was estimated to have a useful life of 8 years, with a salvage value of ₱5,000. It is now going to be replaced by a new machine costing ₱70,000 and ₱30,000 trade-in will be allowed for the old machine. Determine the sunk cost if
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