Question

An automobile purchased for use by the manager of a firm at a price of $24,000 is to be depreciated using the straight-line method over 5 years. What will be the book value of the automobile at the end of 3 years? (Assume the scrap value is $0.)

Answer 1

so straight line method means the car's value goes from $24000 to $0 in5 years.

you need to calculate how much value the car loses per year...

$24000/5 =

next multiply the value from above by 3 and subtract it from $24000

Answer 2

it would be a negative answer?

Answer 3

no... the answer is positive

Book Value = 24000 - 3 x loss per year

Answer 4

oh ok thank you

Answer 5

hope it helps