Assume that a piece of equipment is purchased for $100,000. It costs $5,000 to install the equipment. We expect it to last for 5 years, and believe that we will be able to sell it for $25,000 at the end of that five year period of time.
Using straight-line depreciation, what is the annual depreciation?
After three years, how much accumulated depreciation will there be?
After two years, what is the net or book value of the equipment?