Muntz Power Company uses the composite method and straight-line depreciation for its power plant equipment....
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| Muntz Power Company uses the composite method and straight-line depreciation for its power plant equipment. Its Apple River plant, which began generating electricity January 1, 2024, had the following equipment: |
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| Equipment | Life (Years) | Estimated Cost | Residual Value | ||||
| Turbines | 25 | $5,000,000 | $500,000 | ||||
| Steam pipes | 16 | 3,500,000 | 300,000 | ||||
| Furnace | 20 | 6,500,000 | 250,000 | ||||
| Required: Show your work. |
| ||||||
| 1. Compute the composite depreciation rate. Note: Round your answer to 2 decimal places. |
| 2. Compute the average service life. Note: Round your answer to 1 decimal place. |
| 3. Compute 2024 depreciation. |
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