An oil refinery has decided to purchase some new drilling equipment for $410,000

Question

An oil refinery has decided to purchase some new drilling equipment for $410,000. The equipment will be kept for 7 years before being sold. The estimated SV for depreciation purposes is to be $28,000. Using the SL method, what is the annual depreciation on the equipment? Choose the correct answer below O A. The annual depreciation on the equipment is $50,571. O B. The annual depreciation on the equipment is $58,571 O C. The annual depreciation on the equipment is $54,571. D. The annual depreciation on the equipment is $62,571

Explanation / Answer

The answer is 'c'

You have to deduct the salvage value and then divide it by 7

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