00:01
So hearing this question, firstly, the initial cost of the ship is 20 million and it has lifespan of 20 years.
00:08
So the annual depreciation for the five years, first five years, the annual depreciation for first five years, five years would be, would be 20 million divided by 20 years, that is, one million per year.
00:32
Then at the end of the fifth year, the ship undergoes a major overhaul, which costs 6 million.
00:36
The cost is capitalized, meaning it is added to the cost of the ship.
00:40
So new cost of the ship, cost of ship becomes 20 million, that is the initial cost, plus 6 million, that is the overall cost, that is 26 million.
00:55
Now, the remaining life of the ship is 15 years, that is 20 years minus 5 years...