I have a question similar to yours but im not given the deprecation rate only after tax MARR and tax. How can i find the depreciation rate, d, to be able to find the CTF and CSF?
Sorry, I didn't see you comment for some reason. You definitely need to know the depreciation rate! Maybe your question uses another clue such as the "Asset Class"; this would be an indirect way of specifying the depreciation rate...
The CTF is a factor that accounts for the PW of all the future tax savings created by the depreciation expenses, assuming you own the asset forever, and assuming declining balance depreciation. That's a pretty technical explanation but probably the best I can do in a RUclips comment!
It is derived from an infinite series. Most textbooks show the derivation of the CTF formula; often in an Appendix. You should note that this example assumes the "half year rule" applies to the allowable depreciation expense for the first year the asset is owned.
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This guy has a gift of teaching
Thank you!!
How can I find the y2 ? from the formula for the CTF
I could not thank you enough for the great help
I have a question similar to yours but im not given the deprecation rate only after tax MARR and tax. How can i find the depreciation rate, d, to be able to find the CTF and CSF?
Sorry, I didn't see you comment for some reason. You definitely need to know the depreciation rate! Maybe your question uses another clue such as the "Asset Class"; this would be an indirect way of specifying the depreciation rate...
That was a really helpful video! :) Could you explain how CTF works? Thanks!
The CTF is a factor that accounts for the PW of all the future tax savings created by the depreciation expenses, assuming you own the asset forever, and assuming declining balance depreciation. That's a pretty technical explanation but probably the best I can do in a RUclips comment!
It is derived from an infinite series. Most textbooks show the derivation of the CTF formula; often in an Appendix. You should note that this example assumes the "half year rule" applies to the allowable depreciation expense for the first year the asset is owned.