An office building worth $1 million when completed in 2000 is being depreciated linearly over 80 years. What will be the book value of the building in 2048? (Assume the scrap value is $0.)
A) The book value of the building in 2048 will be $400,000.
B) The book value of the building in 2048 will be $600,000.
C) The book value of the building in 2048 will be $200,000.
D) The book value of the building in 2048 will be $300,000.

Question

Quizplus · Accepted Answer

The building is being depreciated linearly over 80 years, so the annual depreciation is $1,000,000 / 80 = $12,500. In 2048, the building will have been depreciated for 48 years, so the book value will be $1,000,000 - $12,500 * 48 = $400,000.

An Office Building Worth $1 Million When Completed in 2000