1. When declining balance (DB) depreciation is applied, there can be three different depreciation rates involved-d, dmax, and dt. Explain the differences between these rates.
2. An engineer with Accenture Middle East BV in Dubai was asked by her client to help understand the difference between 150% DB and DDB depreciation. Answer the questions if B = $180,000, n = 12 years, and S = $30,000.
a. What are the book values after 12 years for both methods?
b. How do the estimated salvage and the two book values after 12 years compare in value?
c. Which of the two methods, when calculated correctly considering S = $30,000, writes off more of the first cost over the 12 years?