1. A personal property asset has a purchase price of $80,000 and an installation cost of $20,000. Book depreciation method is DDB (α = 2/N) with switching to straight-line method with a 7-year depreciable life and zero salvage value. What is the allowable depreciation for year 6?

a) $4,033

b) $4,958

c) $3,703

d) $8,677

2. Convert a constant dollar payment of $1,000 made 6 years from now into actual dollars in that same time period (i.e. 6 years from now) Given that market interest rate i = 10%, inflation rate f = 5% annual.

a) $1,276

b) $822

c) $1,340

d) $2,013