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Section 13: Investment Analysis 147
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 147 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
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 $500. Using a 200% declining-balance factor,
generate a depreciation schedule for the instrument’s complete life. What is the
remaining depreciable value after the first year
?
What is the total depreciation
after the 7th year
?
Keystrokes Display
fCLEARH
0.00
11000$
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.
*
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.
*
By observation the crossover was year 6. Years 7, 8, and 9 use straight-line depreciation.