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5 Unanswered A project requires $600,000 in equipment which is expected to have a salvage value of $40,000 when the project e
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Depreciation under SLM method is calculated using following formula

Depreciation expense = (C-S) / L

C = Cost of the asset = $ 600,000

S = Salvage value = $ 40,000

L = Life of the asset = 8 years

Substitute all the above data in the formula.

Depreciation expense = (C-S) / L

Depreciation expense per year = ( $ 600,000 - $ 40,000) / 8 years

= ( $ 560,000) / 8

= $ 70,000.

Annual depreciation expense = $ 70,000

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