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ioda
3 years ago
13

A new building that costs $1,400,000 has a useful life of 10 years and a scrap value of $100,000. Using straight-line depreciati

on, find the equation for the value V in terms of t, where t is in years. (Make sure you use t and not x in your answer.)
Business
1 answer:
xz_007 [3.2K]3 years ago
4 0

Answer:

V = $1,400,000 - $130,000t

Explanation:

Data provided in the question:

Cost of the new building = $1,400,000

Useful life = 10 years

Scrap value = $100,000

Now,

using the straight line method

Annual depreciation = [ Cost - Scrap value ] ÷ Useful life

= [$1,400,000 - $100,000 ] ÷ 10

= $130,000

Value of building = Cost of the building - Depreciation for 10 years

V =  $1,400,000 - [ Annual depreciation × Time ]

V =  $1,400,000 - $130,000t

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