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Transcription of this question: 2.Geo Dynamics (GD)Geo Dynamics (GD) is an engineering company. On 1 January 2016, GD purchased newmachinery at a cost of $50000 rather than leasing it. GDS financial manager researchedfurther information:The machinery has a useful life of four years.• Its residual or scrap value will be $8000.The engineering industry uses a 40% depreciation rate per annum.Technology in this industry is changing rapidly.GD’s financial manager has not yet decided on which depreciation method (such as straight lineor reducing/declining balance) to use for the new machinery.(a)(b)(c)(d)Describe one disadvantage for GD of leasing.Calculate the value (also known as net book value) of new machinery at 31 December2017 using the straight line depreciation method (show all your working).Calculate the value (also known as net book value) of new machinery at 31 December2017 using the reducing/declining balance method, applying the industry depreciationrate of 40 % per annum (show all your working).Explain one advantage for GD of using the straight line balance depreciation method.[2][2][2]

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