Final answer:
Annual depreciation of a structure is calculated by subtracting the salvage value from the initial cost of the structure and then dividing it by the structure's useful life. The remaining book value is found by subtracting accumulated depreciation from the initial cost. Key financial considerations include the depreciation method, tax implications, and accounting standards.
Step-by-step explanation:
To calculate the annual depreciation of a structure with an initial investment cost of $17,500,000, you would typically use a method such as straight-line depreciation. You would subtract any salvage value (the estimated value of the asset at the end of its useful life) from the initial cost, then divide it by the number of years in the useful life of the structure. For example, if the estimated useful life is 35 years and the salvage value is $500,000, the calculation would be: ($17,500,000 - $500,000) ÷ 35 = $485,714.29 annual depreciation.
The remaining book value is calculated by subtracting the accumulated depreciation from the initial cost. For instance, after 10 years, the remaining book value would be $17,500,000 - (10 * $485,714.29) = $12,142,857.10. Financial considerations include assessing the impact of depreciation on the firm's financial statements and understanding the tax implications as depreciation can be used as a non-cash expense to reduce taxable income.