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.
Expand 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
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
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Similar Problems from FE Sub Section: Straight Line
441. Depreciation
557. Depreciate
Similar Problems from FE Section: Depreciation
441. Depreciation
557. Depreciate