Question: A firm is considering purchasing an asset that will have a useful life of 7 years and cost $8 million; it will have installation costs

A firm is considering purchasing an asset that will have a useful life of 7 years and cost $8 million; it will have installation costs of $500,000, an estimated salvage or residual value of $1.5 million, and annual straight-line depreciation of $1 million. What would be the book value of this asset after 4 years?

A. $4 million B. $6 million C. $3 million D. $4.5 million

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