The andrews team has just purchased $56,804,000 of plant and equipment that has an estimated useful life of 15 years. suppose at the end of 15 years this plant and equipment can be salvaged for $5,680,400 (1/10 of its original cost). what will be the book value of this purchase (excluding all other plant and equipment) after its first year of use.

Number of years = 15 years

Purchase value = 56,804,000

Salvage value = 5,680,400

Annual depreciation = (Purchase value - Salvage value)/ Number of years

Annual depreciation = (56,804,000 -5,680,400)/15

Annual depreciation = 51,123,600/15

Annual depreciation = 3,408,240

Book value after first year of use = Purchase value - Annual depreciation = 56,804,000 - 3,408,240 = 53,395,760

The book value of this purchase (excluding all other plant and equipment) after its first year of use = $ 53,395,760

the earnings of a typical investor is around $1,000,000 to $10,000,000

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