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An asset costing P 9,000.00 has an expected useful life of 10 years and a salvage value of P 1,000.00. Calculate the total depreciation expense for the first three years using the sum-of-the-years'-digits method.

Engineering Economy MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Engineering Economycivil-engineering-mcqs › engineering-economy
Published
21 Jan 2019
Last updated
28 May 2026

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Explanation

Using the sum-of-the-years'-digits method, the depreciation for the first three years is calculated by multiplying the depreciable amount (cost minus salvage value) by the sum of the digits for those years divided by the total sum of the years' digits. This results in a total depreciation of P 3,927.27 for the initial three years.

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Practice related questions from the same subject.

  1. 1.What type of business structure involves an individual running the enterprise independently, bearing full responsibility for all operations and debts, and retaining all profits?
  2. 2.What is the term used for the factor represented by the formula \[ \frac{i(1+i)^n}{(1+i)^n - 1} \]?
  3. 3.What is the term used for the factor represented by the formula (1 + i)^-n?
  4. 4.Why is the sinking fund method of calculating depreciation rarely adopted in practice?
  5. 5.Which term describes a hypothetical expense that reflects the benefits lost when a specific option is not chosen?
  6. 6.Which technique is commonly applied in assessing municipal projects when the advantages and expenses impact various community groups?
  7. 7.Which approach is typically employed to evaluate different options that serve the same function but have varying lifespans?
  8. 8.What is another term for the capitalized cost of a project?
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