# Suppose a new car is purchased for \$45,357 and depreciates by 21% over the first year of ownership. If the car is driven 12,470 miles in that year, what is the cost, in dollars per 100 miles driven, for depreciation? (Enter a number. Round your answer to the nearest cent.) dollars per 100 miles)

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Suppose a new car is purchased for \$45,357 and depreciates by 21% over the first year of ownership. If the car is driven 12,470 miles in that year, what is the cost, in dollars per 100 miles driven, for depreciation? (Enter a number. Round your answer to the nearest cent.) dollars per 100 miles)

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Step 1

Depreciation is a non cash expenditure.  The asset wears off due to usage over its lifetime. Depreciation, therefore, is the reduction in the value of the asset due to its wear and tear.

Step 2

Given :

Cost of the car= \$45357

Depreciation rate= 21%  over the 1st year

Therefore,

Total Depreciation over the 1st year

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