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SpyIntel [72]
4 years ago
10

Johnson Certified bought a fiber optic cable for $975,000. The estimated life of the cable is 20 years, after which its salvage

value is estimated to be $5,000. Using the straight-line method, what is the annual depreciation to the nearest cent?
Mathematics
1 answer:
ladessa [460]4 years ago
4 0
Remember that s<span>traight line depreciation can be calculated using the formula:
</span>D_{a}= \frac{C-R}{U}
<span>where
</span>D_{a} is the annual depreciation 
C is cost
R is the salvage value 
U is the estimated life in years.

For our problem we know that C=975000, R=5000, and U=5000. Lets replace those values in our formula to find D_{a}:
D_{a}= \frac{975000-5000}{20}
D_{a}= \frac{970000}{20}
D_{a}=48500
<span>
We can conclude that </span><span>the annual depreciation of the optic fiber cable is $45,000</span>
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