Question: A firm is considering purchasing two assets. Asset A will have a useful life of 12 years and cost $3 million; it will have installation

A firm is considering purchasing two assets. Asset A will have a useful life of 12 years and cost $3 million; it will have installation costs of $400,000 and a salvage or residual value of $400,000. Asset B will have a useful life of 8 years and cost $2.5 million; it will have installation costs of $300,000 and a salvage or residual value of $800,000. Which asset will have a greater annual straight-line depreciation?

a. Asset A has $30,000 more in depreciation per year.

b. Asset A has $37,500 more in depreciation per year.

c. Asset B has $30,000 more in depreciation per year.

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