HP 0012C-90001 User Manual

138138138138 Section 13:Section 13:Section 13:Section 13: Investment AnalysisInvestment AnalysisInvestment AnalysisInvestment Analysis9. For a new case, press g(00 and return to step 2.Note:Note:Note:Note: If the number of months in the first calendar year is less than 12, theamount of depreciation in the 1st year will be less than a full year’sdepreciation. The actual number of years that depreciation will occur isequal to the life +1. For example, a drill has a life of 3 years and ispurchased 3 months before the year end. The following time diagram showsthat depreciation will occur over 4 calendar years.Example 1:Example 1:Example 1:Example 1: A property has just been purchased for $150,000. The purchase priceis allocated between $25,000 for land and $125,000 for improvements (building).The remaining useful life of the building is agreed to be 25 years. There is nosalvage value forecasted at the end of the useful life of the building. Thus, thedepreciable value and book value is $125,000.The building was acquired 4 months before the end of the year. Using straight-linedepreciation, find the amount of depreciation and remaining depreciable value forthe 1st, 2nd, 25th, and 26th years. What is the total depreciation after 3 years?KeystrokesKeystrokesKeystrokesKeystrokes DisplayDisplayDisplayDisplayfCLEARG Salvage value = 0 soFV = 0.125000$ 125,000.00 Book value.25w 25.00 Life.1\ 1.00 Year desired.4t~1.001,666.67123,333.33First year:depreciation,remaining depreciable value.t~2.005,000.00118,333.33Second year:depreciation,remaining depreciable value.t 3.005,000.00 Third year:depreciation.~:$:3+~-g(00 11,666.67 Total depreciation through thirdyear.fCLEARG 11,666.67