Question: A firm is considering purchasing two assets. Asset L will have a useful life of 20 years and cost $5 million; it will have installation

A firm is considering purchasing two assets. Asset L will have a useful life of 20 years and cost $5 million; it will have installation costs of $1 million but no salvage or residual value. Asset S will have a useful life of 8 years and cost $2 million; it will have installation costs of $500,000 and a salvage or residual value of $400,000. Which asset will have a greater annual straight-line depreciation?

A) Asset L has $12,500 more in depreciation per year.

B) Asset L has $37,500 more in depreciation per year.

C) Asset S has $12,500 more in depreciation per year.

D) Asset S has $37,500 more in depreciation per year.

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