Answered: An asset that costs $3 million dollars…

An asset that costs $3 million dollars will be depreciated to a zero book value across a 12 year project using the straight-line method. What is the depreciation amount per year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 8QTD

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Question

An asset that costs $3 million dollars will be depreciated to a zero book value across a 12 year project using the straight-line method. What is the depreciation amount per year?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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