A new business computer costs 16000 with a 1000 residual val

A new business computer costs $16,000 with a $1,000 residual value. The estimated life of the computer is 5 years. Using the straight-line method of depreciation, the 5th year depreciation expense would be:

Solution

From straight-line method of depreciation,Depreciation = (Cost - Residual value) / Useful life

so depreciation for nth year depreciation=(16000-1000)/5=$3000