Project Statistics Example | Topics and Well Written Essays - 1250 words - 1

Statistics Project ExampleThe base damage is inclusive of all cost that are associated with making the machine operational and they include purchase cost, raft up cost, installation cost, tax, shipping and freight among others. The residual harbor is the value the firm expects to sell the addition after its useful life and is also referred to as scrap value. The estimated useful life is the breaker point the addition is expected to be apply by the firm (Kimmel and Jerry, 35).a) Assets tend to loss value faster in their first year of operation hence the net book value of the summation in the initial years may not be a true reflection of its market value. If the asset is used as collateral for a loan, the bank may value it differently and hence there allow for be a variance in value assigned.Depreciation of the asset will be found on usage of the asset or the units being produced per period. Therefore, in the year where the asset will be used extensively, the depreciation alloc ation will be higher and will be low when achievement is low. The depreciated value is calculated based on the expected total amount of units it can produce in proportion to the cost basis less residual value. No depreciation is charged the year, which the asset is not in use. This will provide the depreciation of the asset per unit produced. The expected units multiply this for each period to find the amount of depreciation to charge that year and less from the current net book value to find the end year book value of the asset (Kimmel and Jerry, 36).It is an accelerated depreciation method where the majority of the depreciation is allocated in the first years of the asset useful life. It is most appropriate for charging depreciation to asset that loss value fast during their first years and when the company want to shift profit actualization to the future. The depreciation is calculated by multiplying the rate of straight-line depreciation by two and then this is multiplied by the net book value