ā† Notes
šŸ’» Tech Drop Escape
Unit 4 Ā· RB Depreciation
šŸ“‰

System Crash: Asset Values Unknown

DropTech's automated depreciation system has gone offline mid-audit. Every device's book value is a question mark. The auditors arrive at 9am. You're the only one who knows the formula, restore each asset record before time runs out.

Progress
0% 0 / 6 solved
1
Tablet fleet, value after 1 year
DropTech purchased tablets for $1,000 each. They depreciate at 10% p.a. (reducing balance).

What is the value of one tablet after 1 year?
V = P Ɨ (1 āˆ’ r)āæ = 1,000 Ɨ (1 āˆ’ 0.10)Ā¹ = 1,000 Ɨ 0.90
āœ“ Correct, V = $900
2
Laptop bank, value after 2 years
The developer laptops were purchased for $5,000 each and depreciate at 20% p.a.

What is the value of one laptop after 2 years?
Multiplier = 1 āˆ’ 0.20 = 0.80. Then V = 5,000 Ɨ 0.80Ā² = 5,000 Ɨ 0.64
āœ“ Correct, V = $3,200
3
Server rack, value after 2 years
The server rack was a big purchase, $10,000. It depreciates at 30% p.a.

What is the server rack's value after 2 years?
Multiplier = 0.70. V = 10,000 Ɨ 0.70Ā² = 10,000 Ɨ 0.49
āœ“ Correct, V = $4,900
4
Old phones, value after 3 years
These old company phones cost $2,000 each and depreciate aggressively at 50% p.a.

What is the value of one phone after 3 years?
Multiplier = 0.50. V = 2,000 Ɨ 0.50Ā³ = 2,000 Ɨ 0.125
āœ“ Correct, V = $250
5
Mystery machine, find the depreciation rate
One piece of equipment has no rate on file. But the records show it was worth $8,000 at the start of a year, and $2,000 at the end of that same year.

What is the annual depreciation rate as a percentage? (Enter a whole number, e.g. 25 for 25%)
Amount lost = 8,000 āˆ’ 2,000 = 6,000. Rate = (6,000 Ć· 8,000) Ɨ 100
āœ“ Correct, 75% depreciation rate!
6
Fleet vehicle, value after 3 years
The last record: a company vehicle purchased for $20,000, depreciating at 20% p.a. (reducing balance).

What is the vehicle's value after 3 years?
Multiplier = 0.80. V = 20,000 Ɨ 0.80Ā³ = 20,000 Ɨ 0.512
āœ“ Correct, V = $10,240

šŸ’œ SYSTEM RESTORED

Every asset record is back online. The auditors arrive to a fully reconciled ledger, and DropTech's books are clean. You saved the audit.

V = P(1 āˆ’ r)āæ
multiplier = 1 āˆ’ r
Vā‚™ = (1āˆ’r) Ɨ Vā‚™ā‚‹ā‚
curve, not straight line
rate = (loss Ć· P) Ɨ 100
Back to Investing & Planning