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Assignment 7

This document contains details of an assignment for an engineering course. It includes 12 multiple choice questions related to topics like depreciation, inflation, indexes, and rates of return. Students must submit their answers online by November 27, 2015 at 23:59. No late submissions will be accepted.

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369 views2 pages

Assignment 7

This document contains details of an assignment for an engineering course. It includes 12 multiple choice questions related to topics like depreciation, inflation, indexes, and rates of return. Students must submit their answers online by November 27, 2015 at 23:59. No late submissions will be accepted.

Uploaded by

Alex
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ENGR 301 - Assignment 7

Deadline: 23:59, Friday November 27, 2015


Assignments must be submitted online using the multiple choice answer sheet on
the Moodle course website. No submissions will be accepted after the deadline.

Question 7-1
Some special handling devices can be bought for $12,000. At the end of 4 years they can be sold for
$3,500. The book value of the assets after 3 years of depreciation using SOYD is close to:
$4510

$4180

$4420

$4350

Question 7-2
Manufacturing equipment was acquired for $12,000. The book value of this equipment after 3 years of
depreciation using declining balance with a rate of 30% is close to:
$5880

$4998

$7140

$4116

Questions 7-3 to 7-7


The depreciation schedule for certain equipment has been arrived at by various methods. The estimated
salvage value of the equipment at the end of its 7 year useful life is $700. Identify the resulting
depreciation schedules.
Year
1
2
3
4
5
6
7

A
$1,329
$1,329
$1,329
$1,329
$1,329
$1,329
$1,329

B
$2,325
$1,993
$1,661
$1,329
$ 996
$ 664
$ 332

C
$2,857
$2,041
$1,458
$1,041
$ 744
$ 531
S 379

D
$3,161
$2,162
$1,478
$1,011
$ 692
$ 473
$ 323

Question 7-3: Which scheme represents SOYD depreciation?

Question 7-4: Which scheme represents DB depreciation?

Question 7-5: The DB depreciation rate is close to?

25% 28% 32% 30%

Question 7-6: Which scheme represents SL depreciation?

Question 7-7: Which scheme represents DDB depreciation?

Question 7-8
Manufacturing equipment was acquired for $12,000. Determine the undepreciated capital cost of this
equipment after 3 years of depreciation using CCA depreciation as a Class 43 asset.
(Hint: Use the CCA classes and rates posted on the course website)
$5880

$4998

$7140

$4116

Question 7-9
On July 1, 2010 Sarah paid $100,000 for a greenhouse and an additional $50,000 for the land on which
the greenhouse stands. Compute the UCC at the end of year 2.
(Hint: Use the CCA classes and rates posted on the course website)
$100,200

$79,700

$85,500

$92,400

Question 7-10
Ten years ago a machine cost $800,000. Now, the same machine costs $1,200,000. Calculate the average
rate of inflation per year.
3.7%

5.0%

4.1%

4.6%

Question 7-11
An investor bought a tax-free provincial bond, at a cost of $1000 which will pay $50 interest each year for
20 years. The bond will mature in 20 years and return the original $1000. If there is a 2% annual inflation
during this period, what real rate of return will the investor receive?
2.9%

2.5%

3.2%

4.0%

Question 7-12
A composite price index for the cost of vegetarian foods called eggs, artichokes, and tofu (EAT) was 330
ten years ago and has averaged an annual increase of 12% since. Calculate the current value of the index.
480

618

877

1025

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