Discussion
An asset costing 100 000 with a salvage of 10 000 after 9 years has a straight line annual depreciation of
Answer: A
Correct answer: 10 000
\[ \frac{100\,000 - 10\,000}{9} = \frac{90\,000}{9} = 10\,000\ \text{per year.} \] The salvage value must be deducted first; dividing the full cost by nine gives 11 111 and would write the asset down past its salvage value, which is one of the offered distractors.
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