Equipment purchased for $80,000 with a 10-year useful life and $5,000 salvage value is being depreciated using the straight-line method. What is the annual depreciation expense?
Correct Answer
C) $7,500
Straight-line depreciation = (Cost - Salvage Value) ÷ Useful Life = ($80,000 - $5,000) ÷ 10 = $7,500
Why This Is the Correct Answer
Straight-line depreciation = (Cost - Salvage Value) ÷ Useful Life = ($80,000 - $5,000) ÷ 10 = $7,500
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