Vacation Property Rentals purchased 50 television sets for their rental units at a cost of $250 per television. The televisions have an estimated life of 5 years and a salvage value of $40 per set. What is the book value for all of the televisions at the end of the third year?

Question

anonymous · Answer

A)$6,700
B)$7,300
C)$6,600
D)$6,200

triciaal · Answer

original cost = 50tv  * $250/tv = $
salvage value = 50tv * $40/tv = 
estimated life = 5 years 
depreciation rate  = (cost - salvage)/life as a percentage 
cost - depreciation = book value 
rephrased the question is asking what is the value when t = 3 ?

anonymous · Answer

Hm

triciaal · Answer

this is just one approach hope it helps

anonymous · Answer

Thanks I was just wondering would i divide by three or five?

triciaal · Answer

i divided by 5 to get the expected depreciation rate per year 
i multiplied by 3 to get the amount after 3 years