Value-Time Functions
A value-time function is a mathematical function that models how an asset loses value over time. The simplest value-time function is known as straight-line. The straight-line value-time function assumes that the asset loses value at a constant rate (i.e., as a fixed percentage of the asset's original value) over its lifetime. An asset that originally cost $10,000 and has a 10-year expected life is assumed to have a value of $3,000 7 years after it was bought. The straight-line value-time function is shown in Figure 14.1.
Figure 14.1. Straight-line value-time function
Another value-time function is called declining-balance ...
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