Fuelit Bpp Q17 – Adv Inv Appraisal

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    tokunboayoola
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    • Topics: 5
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    In this question the project is for 25 years and starts in 3 years’ tie; dep at 10%. In the solution dep was charged for the first 15 years and not thereafter. Is there any reason for ? I don’t want to just assue . Tanx!


    Profile photo of John Moffat
    John Moffat
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    Depreciation is charged for 10 years (not for 15).

    The reason is that it is 10% straight line (note i). After 10 years at 10% p.a. the book value will be zero.

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