SOLVE 15.18

16.12 An asset that is book-depreciated over a 5-year pe riod by the straight line method has BV $62,000 with a depreciation charge of $26,000 per year Determine (a) the first cost of the asset and (b) the assumed salvage value 16.21 A video recording system was purchased 3 years ago at a cost of $30,000. A 5-year recovery period and DDB depreciation have been used to write off the basis. The system is to be replaced this year with a trade-in value of $5000. What is the difference be- tween the book value and the trade-in value? 16.29 A plant manager for a large cable company knows that the remaining invested value of certain types of manufacturing equipment is more closely ap- proximated when the equipment is depreciated linearly by the SL method compared to a rapid write-off method such as MACRS. Therefore, he keeps two sets of books, one for tax purposes (MACRS) and one for equipment management purposes (SL). For an asset that has a first cost of $80,000, a depreciable life of 5 years, and a sal- vage value equal to 25% of the first cost, deter- mine the difference in the book values shown in the two sets of books at the end of year 4 15.18 A consulting engineering firm is preparing a pre- liminary cost estimate for a design-construct proj- ect of a coal processing plant. The firm, which completed a similar project in 2001 with a con- struction cost of $30 million, wants to use the ENR construction cost index to update the cost. Use the values in Table 15-3 to estimate the cost of con struction for a similar-size plant in mid-2010