Book value is the value of an asset that a company uses to create its balance sheet. Some companies depreciate assets using straight-line depreciation so that the value of the asset declines by a fixed amount each year. The amount of decline depends on the useful life that the company assigns to the asset. Suppose a company just purchased a fleet of new cars for its sales force at a cost of Ghs 31,500 per car. The company chooses to depreciate each vehicle using the straight-line method over 7 years. This means that each car will depreciate by Ghs 4500 per year. 

Translate this into a mathematical equation and determine the value of the book of each car after 3 years.

Answer rating: 100% (QA)

Book Value 31500 4500 3 Book Value 18500 Explanation The equation for the book value of the ca... View the full answer