Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

تمرين 25

Bristol Myers Squibb purchased a tablet-forming machine in 2008 for $750,000. The company planned to use the machine for 10 years; however, due to rapid obsolescence it will be retired after only 4 years in 2012. Develop a spreadsheet for depreciation and book value amounts necessary to answer the following.
a) What is the amount of capital investment remaining when the asset is prematurely retired
b) If the asset is sold at the end of 4 years for $175,000, what is the amount of capital investment lost based on straight line depreciation
c) If the new-technology machine has an estimated cost of $300,000, how many more years should the company retain and depreciate the currently owned machine to make its book value and the first cost of the new machine equal to each other