a truck is purchased for $22,500 and has a resale value of $16,500 after a useful life of 5 years. using a…
a truck is purchased for $22,500 and has a resale value of $16,500 after a useful life of 5 years. using a book value depreciation chart, calculate the number of years until the book value of the truck is $17,700.\n? years
Answer
Explanation:
Step1: Calculate annual depreciation
The total depreciation over 5 years is the initial cost minus the resale value: $22500 - 16500 = 6000$. So annual depreciation is $\frac{6000}{5}=1200$.
Step2: Calculate depreciation needed
We need to find how much depreciation occurs to reach a book value of $17700$. The depreciation needed is $22500 - 17700 = 4800$.
Step3: Find number of years
Since annual depreciation is $1200$, the number of years is $\frac{4800}{1200}=4$.
Answer:
4