Question

A structure's reproduction cost new is $489,900. The structure has an effective age of 4 years and was built 10 years ago. Assuming an economic life of 60 years, how much is the estimated annual depreciation?

Answer 1

Annual depreciation will be $32660

Explanation:

We have given effective year = 4 years

Economic life = 60 years

Reproduction cost of the structure = $489900

We have to calculate the annual depreciation

Annual depreciation is given by

Annual depreciation
`=(effective\ age)/(economic\ life)* reproduction\ cost=(4)/(60)* 489900=$32660`

So annual depreciation will be $32660