Question: A firm is considering purchasing two assets. Asset L will have a useful life of 15 years and cost $4 million; it will have installation

A firm is considering purchasing two assets. Asset L will have a useful life of 15 years and cost $4 million; it will have installation costs of $750,000 but no salvage or residual value. Asset S will have a useful life of 5 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 $54,167 more in depreciation per year.

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

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

d. Asset S has $103,333 more in depreciation per year.

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