Wednesday, May 13, 2009

May 12th on the 13th

Well I made a post last night.... but it didn't seem to publish. I was having a hard time publishing it.. kept getting an error message and eventually it said it posted... but apparently not. Anyways... lets see how close I can get to the previous post that never made it up.

Well we continued to use the same program through APPS then into Finance.

We also talked about Depreciation value.
Depreciation is the amount of value a thing loses. The depreciation Rate is how much value it loses per time period. weather it be week... month or maybe year.

An example would be if a car lost 10% of its value every year... and lets just say the car was worth $10,000.00, after one year the car would be worth $90,000.00. Now this is the part you have to remember. when it comes to the price after the second year, you cant just take 20% off of the initial price ($100,000). you have to take 10% off of the value at the end of the 1st year (the $90,000.00).
There are two ways of doing this... you can either make a chart that looks like ..
Year initial value End of year
1 $10,000 $90,000
2 $ 90,000 $81,000
3 and so on...........
you can use the formula I(r)^n
I=initial amount
r= depreciation rate
n=number of years (or whatever the time period is at which the depreciation value is based upon)

we also looked deeper into leasing. We discussed how when u lease a car... you are only paying for the part of the car u are using because at the end of your lease... u have to give back the car. Now when you give it back, it is not worth as much as it was when you first got it.

Leasing a car is like asking for a bite of food. You still get to taste it.... but you don't get the whole thing. You enjoy your piece, then give the rest back.

As I was saying before, the depreciation is the value of the car that you have used up.. and the value that u give back to the dealer is called the residual value.

Since you use up the depreciated value, you have to pay sales tax on that part. You do not however have to pay taxes on the residual value.

Much like today, we went over some of the Pros and Cons to both leasing and Buying.
Leasing a vehicle is good for someone who can only afford small monthly payments, who doesn't want to worry about dealing with trading in or selling a vehicle when they no longer want it or who likes to change vehicles often.
Buying a vehicle on the other hand is good for someone who can afford to outright buy a car, who used a vehicle allot (travels long distances, across town commute etc.) or who likes to make customizations to their vehicle.

That is about all the things we went over....
I already chose the scribe for today but i will just put it up anyways for record sake ( Eugene )
I apologize again for not posting it last night... i really thought it was up.


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