A car is purchased for $10,000 and is to be depreciated over five years. The estimated salvage value is $1000. Using the double-declining-balance method, the function calculates the depreciation for each year and returns the remaining depreciable value at the end of the life of the car.
The large value returned at the final year is the sum of the depreciation over the life time and is equal to the difference between the Cost and Salvage. The value of the asset in the final year is computed as (Cost - Salvage) = Sum_Depreciation_Upto_Final_Year.
A general declining-balance depreciation
schedule is a method of calculating depreciation that applies a
fixed percentage rate to the book value of an asset at the beginning of each period.
This approach results in a decreasing amount of depreciation expense over the
asset's useful life, reflecting the declining value of the asset as it ages. It is
commonly used for assets that lose value more quickly in their earlier years.
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