UV7670 University of Virginia Vincent Buys a Lawn Mower Article Answers

Reading Time: < 1 minute

Please read the article “Vincent Buys a Lawn Mower” from the HBS article pack and answer the following questions.

Each answer should be about a half page (single spaced, 12 pt font, 1″ margins) in length. Grading will be based on content but good grammar, spelling and punctuation are expected in order for you to convey your thoughts clearly.

Questions

1) In running the simulation you have seen the use of depreciation. What are some benefits of depreciation? Are there any drawbacks to depreciation?

2) Create depreciation tables for the two riding lawnmowers needed this coming year. Calculate straight-line, double-declining and sum or years depreciation and book value tables.

3) Which depreciation method should Vincent select for these riding mowers? Please explain your reasoning.