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A new piece of equipment cost a company $15,000. Each year, for tax purposes, the company depreciates the value by 15%. What value should the company give the equipment after 5 years?

Short Answer

Expert verified

The value should be $6655.58

Step by step solution

01

Given information

We are given a1=15000;an=ran-1where r=anan-1

Also r=0.85

02

Calculate

We have to calculate the value the company should give after 5 years that is a6use the relation

localid="1647861079690" an=arn-1a6=ar5a6=15000(0.85)5a6=6655.58

03

Conclusion

The value should be $6655.58

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