Question

The amount of the average investment for a proposed investment of $191,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $30,300 for the 4 years is a.$47,750 b.$7,575 c.$30,300 d.$95,500

Answer 1

$30300
Annual depreciation = (purchase price - salvage value) / useful life
Straight line depreciation = Annual depreciation / (purchase price -salvage value)
The steps in calculating a straight line depreciation are:
Find out how much the asset costs.
To determine the entire depreciable amount, deduct the asset's estimated salvage value from the asset's purchase price.
Find out how long the item will be useful.
To calculate the annual depreciation amount, multiply the total from steps (2) and (3) by the figure determined in steps (3).
i.e, = $191000-$30300 = $160700
an asset with a useful life of 4 =$160700/4 =$40 175
so the straight-line depreciation rate is at 4.7%
In 4 years Straightline depreciation will be $30300
To learn more about Straight line depreciation please refer to-
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