If a company spends $14.4 million to install refurbished footwear-making equipment with capacity to produce 1 million pairs of a

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2 years ago

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thletic footwear at its North American production facility, then its annual depreciation costs at that facility will rise by

1 answer:

Margaret [11] · Answer 1 · 2023-01-19T20:28:41+03:00

The annual depreciation costs at that facility will rise by 10% or $1,440,000.

<h3>Annual depreciation costs</h3>

Life of the equipment = 10 Years

Salvage value = 0

Annual Depreciation= (Cost of equipment - Estimated salvage value) / Estimated useful life

Annual Depreciation= ($14.4 million- 0) / 10

Annual Depreciation= $1,440,000

or

Annual Depreciation= $1,440,000/$14,400,000 ×100

Annual Depreciation= 10%

Inconclusion the annual depreciation costs at that facility will rise by 10% or $1,440,000.

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