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The Health Hospital purchased a new medical equipment for $90,000. The estimated salvage value is $5,000. The equipment has a useful life of five years and the hospital expects to use it 10,000 hours

The Health Hospital purchased a new medical equipment for $90,000. The estimated salvage value is $5,000. The equipment has a useful life of five years and the hospital expects to use it 10,000 hours. It was used 1,600 hours in year 1; 2,200 hours in year 2; 2,400 hours in year 3; 1,800 hours in year 4; 2,000 hours in year 5. Instructions (a) Compute the annual depreciation for each of the five years under each of the following methods: (1) straight-line. (2) units-of-activity. (b) If you were the administrator of the hospital, which method would you deem as most appropriate? Justify your answer.

Apr 12 2021 View more View Less

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