Question

quipment purchased in 2006 for ​$30 comma 000 must be replaced in late 2017. What is the estimated cost of the replacement equipment based on the following cost​ indices?      End of Year Index End of Year Index 2004 130 2011 191 2005 143 2012 200 2006 149 2013 215 2007 150 2014 231 2008 161 2015 247 2009 176 2016 256 2010 182 2017 265 ​(estimated)

Answer 1

Answer:

$53,355.7047

Explanation:

The computation of the estimated cost of the replacement cost is shown below:

Estimated cost = (old cost i.e purchased cost of an equipment ÷ Cost index of that year i.e 2006) × estimated cost index  for 2017

= ($30,000 ÷ 149) × 265

= $53,355.7047

We simply applied the above formula so that the estimated cost could come