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(a) A truck is purchased for $20,000. At the end of its 5 year life its salvage value will be $2000. Using general straight line depreciation compute the book value of the truck after 3 years.

(b) A machine costs $10000, has an estimated life of 10 years and a scrap value of $1500. Assuming no inflation and an interest rate of 4%, what uniform annual amount must be invested at the end of each of the 10 years in order to replace the machine?

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