A Firm Is Considering Purchasing an Asset That Will Have

question 33

Multiple Choice

A firm is considering purchasing an asset that will have a useful life of 10 years and cost $5 million;it will have installation costs of $500,000 and a salvage or residual value of $500,000.What is the annual straight-line depreciation for this asset?

• A)$400,000 per year
• B)$500,000 per year
• C)$600,000 per year
• D)$700,000 per year

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