Question

(4 pts) An inspecting and profiling web controller that costs $40,000 has a life of 8 years with a $5,000 salvage value. The estimated annual operating and maintenance cost is $3,700 per year. Use classical straight line depreciation to determine the annual depreciation at the end of year 5.

Answer 1

Answer: $4,375

Explanation:

Annual Depreciation at end of year 5 is the same as every year as this is classical straight line depreciation.

= (Cost - Salvage value) / Useful life

= (40,000 - 5,000) / 8

= $4,375