A firm is considering purchasing an asset that will have a useful life of 15 years and

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Question:

A firm is considering purchasing an asset that will have a useful life of 15 years and cost $7.5 million; it will have installation costs of $300,000 and a salvage or residual value of $1,800,000. What is the annual straight-line depreciation for this asset?

a. $400,000 per year

b. $498,750 per year

c. $530,450 per year

d. $422,000 per year