a computer system upgrade costs $4,750. it has a useful life of 4 years and a salvage value of $1,250. which…

a computer system upgrade costs $4,750. it has a useful life of 4 years and a salvage value of $1,250. which table represents the first three years of straight - line depreciation of this asset?

a computer system upgrade costs $4,750. it has a useful life of 4 years and a salvage value of $1,250. which table represents the first three years of straight - line depreciation of this asset?

Answer

Explanation:

Step1: Calculate annual depreciation

The formula for straight - line depreciation is $D=\frac{C - S}{n}$, where $C$ is the cost of the asset ($C = 4750$), $S$ is the salvage value ($S = 1250$), and $n$ is the useful life ($n = 4$). So, $D=\frac{4750 - 1250}{4}=\frac{3500}{4}=875$.

Step2: Calculate value at the end of year 1

The initial value is $4750$. After year 1, the value $V_1$ is $V_1=4750 - 875=3875$.

Step3: Calculate value at the end of year 2

The value at the start of year 2 is $3875$. After year 2, the value $V_2$ is $V_2=3875 - 875 = 3000$.

Step4: Calculate value at the end of year 3

The value at the start of year 3 is $3000$. After year 3, the value $V_3$ is $V_3=3000 - 875=2125$.

The table with year 1 value $4750$, year 2 value $3875$, and year 3 value $3000$ is the correct one.

Answer:

The table with the following values:

Year Value ($)
1 4750
2 3875
3 3000