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    Composite life of assets

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    A schedule of machinery owned by Rain Bird Manufacturing Company is as follows:

    Estimated Estimated
    Total Cost Salvage Value Life in Years

    Machine A $450,000 $30,000 6
    Machine B 170,000 10,000 8
    Machine C 40,000 0 4

    Rain Bird computes composite depreciation on the straight-line method. What is the composite life of these assets?

    o 6.2
    o 6.6
    o 6.0
    o 7.5

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    Solution Summary

    The solution explains how to calculate the composite life of assets