Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 44

A cooling-water pumping station at the LCRA plant costs $600,000 to construct, and it is projected to have a 25-year life with an estimated salvage value of 15% of the construction cost. However, the station will be book-depreciated to zero over a recovery period of 30 years. Calculate the annual depreciation charge for years 4, 10, and 25, using
a) straight line depreciation and b) DDB depreciation. c) What is the implied salvage value for DDB d) Use a spreadsheet to build the depreciation and book value schedules for both methods to verify your answers.