## Straight Line Depreciation

A machine shop purchases a piece of equipment that costs $8,000. It has a salvage value of $500, and a 10 year lifespan. Calculate the straight line depreciation.

##
__
__**Hint**

**Hint**

The straight line depreciation formula is:

$$$D_{j}=\frac{C-S_{n}}{n}$$$

where
$$C$$
is the initial cost,
$$n$$
is the life span, and
$$S_n$$
is the expected salvage value in year
$$n$$
.

##
__
__**Hint 2**

**Hint 2**

The answer should be in dollars per year.

The straight line depreciation formula is:

$$$D_{j}=\frac{C-S_{n}}{n}$$$

where
$$C$$
is the initial cost,
$$n$$
is the life span, and
$$S_n$$
is the expected salvage value in year
$$n$$
.

$$$D_{j}=\frac{\$8,000-\$500}{10\:year}=\$750/yr$$$

The equipment is depreciating $750 every year.

$750 per year