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What is srtaight line method?
Straight line method of depreciation is that under which any asset is depreciated in equal amount for every year till salvage value. Formula for straight line method: Depreciation = (Cost price - Salvage Value)/Number of years
Straight line method?
The straight-line method of depreciation depreciates a capital asset evenly over its useful life until it reaches its salvage value (i.e., the value at which the asset can be sold at the end of its useful life). As an equation: Annual S/L Depreciation = (Cost - Salvage Value) / Useful Life
Is depreciation charged on the original cost or the difference between original cost and salvage value in written down value method?
Under written down balance method depreciation is charged from original value and after that on written down balance until useful life of asset and any amount remaining at the end of useful life is the salvage value.
How to compute after tax salvage value?
Salvage Value - [Tax * (Market Value - Book Value)
What is the formula for a straight line depreciation method?
The formula for a straight line depreciation method is the Cost minus the Salvage Value over the Life in Number of Periods which will equal Depreciation.
How do you calculate payback period using bail-out method?
Initial Net Investment / (Annual expected cash flow + salvage value)
Salvage value by written down value method and straight line method?
The salvage value will always be more in the case of written down value method as compared to straight line method. Presently written down value methods are given importance.
What is the difference between payback and discounted payback?
Simple payback method do not care about the time-value of money principle while discounted payback period do take care of this principle in calculation.
Criticism of payback period?
The basic criticisms of the payback period method are that it does not measure the profitability of an investment and it does not consider the time value of money.
What are the weaknesses of the payback method?
the payback method ... is a method to evaluate the project in capital budgeting ... or simply in a long term dicision making for the entity .and because it is a long term in nature ..... the risk is high ... by evaluatining methods ... we try to reduce the uncertinity ... one of the methods ...is payback method . the disadvantage of the payback method is ...it does not concern with the time value of money theory ....the second one is ...it ignore the incash flow and the outcash flow of the project , after the payback period .
What is srtaight line method?
Straight line method of depreciation is that under which any asset is depreciated in equal amount for every year till salvage value. Formula for straight line method: Depreciation = (Cost price - Salvage Value)/Number of years
Straight line method?
The straight-line method of depreciation depreciates a capital asset evenly over its useful life until it reaches its salvage value (i.e., the value at which the asset can be sold at the end of its useful life). As an equation: Annual S/L Depreciation = (Cost - Salvage Value) / Useful Life
Is depreciation charged on the original cost or the difference between original cost and salvage value in written down value method?
Under written down balance method depreciation is charged from original value and after that on written down balance until useful life of asset and any amount remaining at the end of useful life is the salvage value.
What are the three capital expenditure techniques?
Internal rate of return, net present value, accounting rate of return and payback method.
Investment Appraisal Methods?
The Payback method is one of the investment appraisal methods. Other methods to appraise investments are the Average Rate of Return and the Net Present Value method.
A method of evaluating capital investment proposals that ignore present value includes?
using payback period as the primary metric for decision making. The payback period measures the length of time it takes for the initial investment to be recovered from the project's cash flows. This method disregards the time value of money and does not account for the profitability or net present value of the investment.
Difference between scrap value and salvage value?
Salvage value is defined as the value of the product after its useful life .In other words it is the value after depreciation. Salvage value also known as scrap value.
