Question

A wood products company has decided to purchase new logging equipment for ​$ with a​ trade-in of its old equipment. The old equipment has a BV of ​$ at the time of the​ trade-in. The new equipment will be kept for years before being sold. Its estimated SV at the time is expected to be ​$_____________. Using the MACRS​ (GDS recovery​ period), what is the depreciation charge permissible at year ?

Answer 1

The nation's GDP is calculated by taking the value of final goods, which is $250 worth of bookshelves produced using the trees and lumber.

Step-by-step explanation:

The question pertains to the calculation of Gross Domestic Product (GDP), which is the total market value of all final goods and services produced within a country's borders in a given period. To calculate the GDP of the small nation described, one must consider the value of the final products, which includes bookshelves, lumber for those bookshelves, and trees. Here, the trees are considered an intermediate good and are not counted directly in the GDP if the value is already included in the value of final products. However, if the nation sold some of its trees as final products, then this value should be included in GDP.

In this case, the final goods are $250 worth of bookshelves which includes the value of lumber used. Since lumber has been processed from trees and then used to make bookshelves (the final product), we only count the value of bookshelves for GDP. Thus, the nation's GDP, accounting for the final products produced, is $250.

Answer 2

The question is incomplete, so I looked for a similar one:

A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Using the MACRS​ (GDS recovery​ period), what is the depreciation charge permissible at year 1?

Depreciable value using MACRS is $100,000 and logging equipment is classified as 7 year class, and I will use the half-year convention:

depreciation year 1 = $100,000 x 14.29% = $14,290