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projectA initial cost 12000, scape value is 10% of initial cost, what is the projectA annual depreciation

Question

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Solution

Depreciation is the decrease in the value of an asset over time. In this case, we are asked to find the annual depreciation of Project A. Here are the steps to calculate it:

Step 1: Determine the initial cost of the project. The initial cost of Project A is given as $12,000.

Step 2: Determine the salvage value of the project. The salvage value is the estimated value of the asset at the end of its useful life. In this case, it's given as 10% of the initial cost. So, 10% of 12,000is12,000 is 1,200.

Step 3: Determine the useful life of the project. The useful life is not given in the question. However, it's a crucial factor in calculating depreciation. Let's assume the useful life of the project is 10 years for the purpose of this calculation.

Step 4: Calculate the annual depreciation. The formula for calculating annual depreciation using the straight-line method is:

(Initial Cost - Salvage Value) / Useful Life

So, the annual depreciation of Project A would be:

(12,00012,000 - 1,200) / 10 = $1,080

So, the annual depreciation of Project A is $1,080.

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