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I just found this.
Part d, said current replacement cost for library is $2.1m.
The answer depreciated this amount.So, it said “current” replacement cost. I thought it is the value “now”, so why depreciated 6 years? Question not mentioning such amount was 6 years ago…
Somebody help me to explain what current replacement cost is, maybe is I misled.
Think of it as the $2.1m being the cost to actually replace the building right now, and therefore the building would be all shiny and new and start being depreciated from that point.
However, the building is not literally going to be replaced, so it is therefore still 6 years old and that must be reflected by deducting 6 years depreciation from its current replacement cost.
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