Explore BrainMass

# Depreciation of assets

Not what you're looking for? Search our solutions OR ask your own Custom question.

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

The attached file contains a worked example from a textbook. Explain it.

Neglecting income taxes and assuming an interest rate of 0%, calculations for determining the most economic replacement interval are as follows.

See Attached

https://brainmass.com/math/basic-algebra/depreciation-assets-2279

#### Solution Preview

This problem is greatly simplified by assuming an interest rate of 0%. All you need to do is think about the "average cost per year" if you kept the machine for each of the specified years. Since the time value of money is not considered with an interest rate, the calculations are simplified in the following way:

If you kept the machine 1 year, it ...

#### Solution Summary

This explains an example problem regarding depreciation.

\$2.49