Question

Straight-line depreciation is a method of calculating an asset’s value by subtracting its salvage value from its acquisition or purchase price divided by the estimated useful life of the asset. suppose a manufacturing robot cost $1.5 million in 2005 and is sold in 2010 for $50,000. what is the linear equation representing the value of the robot?

Answer 1

1500000-50000/5years=290000

Answer 2

Linear equation is V(t) = 1500 - 290t

Explanation:

To find the linear equation representing the value of the robot we will calculate per year depreciation in the cost of the robot.

Rate of depreciation =
`\frac{\text{(Manufacturing cost in 2005-selling price in 2010)}}{5}`

=
`([(1.5)(10^(6))-50000])/(5)`

=
`((1500000-50000))/(5)`

=
`(1450000)/(5)=290000`

If depreciation is represented by V(t) (in $000) then equation will be

V(t) = 1500 - 290t