A motorized cultivator with a first cost of $28,000 and salvage value of 25% of the first

Question:

A motorized cultivator with a first cost of $28,000 and salvage value of 25% of the first cost is depreciated by the DDB method over a 5-year period. If the operating cost is $43,000 per year, the depreciation charge for year 2 is closest to:

(a) $18,000

(b) $11,200

(d) $4350

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...

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