Question #$13$

Bright Horizons Skilled Nursing Facility, an investor$-$owned company, constructed a new building to replace its outdated facility. The new building was completed on January $1,2019,$ and Bright Horizons began recording depreciation immediately. The total costs of the new facility was $$15,000,000,$ compromising $($a$)$ $$10$ million in construction costs and $($b$)$ $$5$ million for the land. Bright Horizons estimated that the new facility would have a useful life of $20$ years. The salvage value of the building at the end of its useful life was estimated to be $$1,500,000.$ Using the straight$-$line method of depreciation, calculate annual depreciation expense on the new facility.

What is Bright Horizon's depreciation expense per year?

Choice: $$88,000$

Choice: $$800,000$

Choice: $$425,000$

Choice: $$1,375,000$