In the following exercise, assume straight-line depreciation. A word processor costs $\$ 540.00$ when new and is expected to be worth $\$ 165.00$ after 5 years. What will it be worth after 3 years?
A) $\$ 315.00$
B) $\$ 352.50$
C) $\quad \$ 540.00$
D) $\quad \$ 165.00$
E) $\quad \$ 375.00$

Question

Quizplus · Accepted Answer

The depreciation per year is $(\$540.00 - \$165.00) / 5 = \$75.00$. After 3 years, the value depreciated is $3 \times \$75.00 = \$225.00$. The value after 3 years is $\$540.00 - \$225.00 = \$315.00$.

In the Following Exercise, Assume Straight-Line Depreciation $540.00\$ 540.00$540.00 When New and Is Expected to Be Worth

In the Following Exercise, Assume Straight-Line Depreciation $\$ 540.00$ When New and Is Expected to Be Worth