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jl0329
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| Posted: 23 Feb 2012 at 11:11 | IP Logged
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This is related to NPV calculation.
When calculating the tax shield of a deprecation of a new
machine, should the shipping and installation fee of the
new machine be included in the depreciation calculation?
Ex. a new machine cost 100, shipping and installation
cost 20. Is the depreciation base 100 or 120?
My guts tell me it's 100, but I've seen different answers
on Becker's which includes the shipping and installation
fee.
Please advice!
Thank you!
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jl0329
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| Posted: 23 Feb 2012 at 11:13 | IP Logged
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Actually, I think the shipping and installation cost
should be capitalized as a part of the machine's book
value.
Can somebody confirm this?
Thanks!
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Entourage
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| Posted: 23 Feb 2012 at 13:17 | IP Logged
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Yes, you definitely include it for the depreciation shield.
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jl0329
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| Posted: 23 Feb 2012 at 14:23 | IP Logged
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Thanks Entourage!
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Topic: Depreciation: Acquiring a new machine
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