"DEPRECIATION, SINKING FUND METHOD, BOOK AND SCRAP VALUE. The SINKING FUND METHOD for DEPRECIATION has two advantages: greater depeciationof asset value in early years and interest is credited to the fund at the nominal annual interest rate ANNRATE%. ORIGCOST is the orignal cost of asset. SCRPVAL is the scrap or salvage value of the asset. NUMYEARS is the term in years. PAYMNINT is the payment interval in months. DPRCHARG is the periodic depreciation charge. DPRVALU is the value of sinking fund at term. EFFRATE% is the yearly effective rate for fund amortization. PRESVALU is the value of debt just after payment for PERIOD#. FUNDINCR and INTADDED are fund's increase and added interest, respectively. BOOKVALU is current book value. AGE DEPREC. CHARGE FUND INT. FUND INCR. FUND AMOUNT BOOK VALUE 1 $1119.79 $ 0 $1119.79 $1119.79 $2880.21 2 1119.79 78.39 1198.18 2317.97 1682.03 3 1119.79 162.25 1282.04 3600.01 399.99 *** Answers to problems *** (c) PCSCC, Inc., 1993 (a) Set ANNRATE%=7, NUMYEAR=3, ORIGCOST=4000, PAYMNINT=12 (annual= 12 months), PERIOD#=1, SCRPVAL=400. Deposit is depr. chrg. of $1119.79. (b) Depreciation table is listed above for PERIOD#=1, =2, =3. Type any key to exit. ||(a) A personal computer costing $4000 new is estimated to have a useful life of 3 years and a scrap value of $400. Use the sinking fund method to find the annual fund deposit at 7%. (b) Prepare a depreciation schedule. Type , to see answers. Type (F2) to return to helpfile."
