Capital Expenditure for Tertiary Care Hospital
See the attached file.
You are the CFO of a 720-bed tertiary care hospital. You have been presented with a capital expenditure request for a state-of-the-art MRI machine to be purchased on 01-01-09 for a cost of $1,250,000 with a useful life of 6 years and an expected salvage value of $35,000.
Calculate depreciation for the entire 6 year period using four depreciation methods.
For SL and SYD, calculate and use the depreciable base to determine yearly depreciation expense.
For DDB, use the total asset cost to calculate yearly depreciation but do not let total depreciation be greater than the depreciable base.
For MACRS, use Table 9-2.
Total depreciation is the same for SL, SYD, and DDB. Some of the yellow highlighted cells may not require a value.
SL METHOD
Depreciation for 2009
Depreciation for 2010
Depreciation for 2011
Depreciation for 2012
Depreciation for 2013
Depreciation for 2014
Depreciation for 2015
Depreciation for 2016
TOTAL DEPRECIATION
SYD METHOD
Depreciation for 2009
Depreciation for 2010
Depreciation for 2011
Depreciation for 2012
Depreciation for 2013
Depreciation for 2014
Depreciation for 2015
Depreciation for 2016
TOTAL DEPRECIATION
DDB METHOD
Depreciation for 2009
Depreciation for 2010
Depreciation for 2011
Depreciation for 2012
Depreciation for 2013
Depreciation for 2014
Depreciation for 2015
Depreciation for 2016
TOTAL DEPRECIATION
MACRS METHOD
Depreciation for 2009
Depreciation for 2010
Depreciation for 2011
Depreciation for 2012
Depreciation for 2013
Depreciation for 2014
Depreciation for 2015
Depreciation for 2016
TOTAL DEPRECIATION.
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Solution Summary
The solution examines capital expenditures for a 72-bed tertiary care hospital. The depreciation for the entire 6 year period using four depreciation methods is computed.