144 Section 13: Investment Analysis
Example: An electronic instrument is purchased for $11,000, with 6 months
remaining in the current fiscal year. The instrument’s useful life is 8 years and
the salvage value is expected to be $500. Using a 200% declining-balance factor,
generate a depreciation schedule for the instrument’s complete life. What is the
remaining depreciable value after the first year? What is the total depreciation
after the 7th year?
Keystrokes (RPN mode) Display
fCLEARH
0.00
11000$
11,000.00
Book value.
500M
500.00
Salvage value.
8n
8.00
Life.
200¼
200.00
Declining-balance factor.
1\
1.00
First year depreciation desired.
6t
~
1.00
1,375.00
9,125.00
First year:
depreciation,
remaining depreciable value.
t
2.00
2,406.25
Second year:
depreciation.
t
3.00
1,804.69
Third year:
depreciation.
t
4.00
1,353.51
Fourth year:
depreciation.
t
5.00
1,015.14
Fifth year:
depreciation.
t
6.00
761.35
Sixth year:
depreciation.
a
a By observation the crossover was year 6. Years 7, 8, and 9 use straight-line depreciation.
t
7.00
713.62
Seventh year:
depreciation.
:1
9,429.56
Total depreciation through the
seventh year.
t
8.00
713.63
Eight year:
depreciation
t
9.00
356.81
Ninth year:
depreciation.
