Answer:
The value of building in 2014 is 0.92 million.
The value of building in 2018 is 0.84 million.
Step-by-step explanation:
Consider the provided information.
An office building worth $1 million when completed in 2010.
That means the first ordered pair is (0, 1)
Here, 1 is the y intercept.
Here, 0 represents the building is 0 year old while 1 is the worth of building i.e 1 million.
It being depreciated linearly over 50 years and the scarp value is $0.
That means the second ordered pair is (50, 0)
Where, 50 represents, the building is 50 year old while 0 is the worth of building i.e 0 million.
Now use the slope formula:
The slope intercept form is y=mx+c
Where m is slope and c is the y intercept.
We know slope of the line is -1/50 and y intercept is 1.
Thus, the slope intercept form of the line is:
Where, x is the time(in years) and y is the value of the building(in millions of dollars).
Now we want the book value of the building in 2014.
First find the value of x and substitute it in the above equation of line.
x=2014-2010=4
Substitute the value of x in
Thus, the value of building in 2014 is 0.92 million = 920 thousand dollars.
Now find the value in 2018.
First find the value of x and substitute it in the above equation of line.
x=2018-2010=8
Substitute the value of x in
Thus, the value of building in 2018 is 0.84 million = 840 thousand dollars.