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A vehicle that depreciate over 5 years, is purchased at a cost of R170000.00 and will have a salvage value of R20000. Calculate its annual line depreciation expense.

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Answer to a math question A vehicle that depreciate over 5 years, is purchased at a cost of R170000.00 and will have a salvage value of R20000. Calculate its annual line depreciation expense.

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Velda
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To calculate the annual straight-line depreciation expense, we first need to determine the depreciable amount.

\begin{aligned} \text{Depreciable amount} &= \text{Cost of the vehicle} - \text{Salvage value} \ &= R170000.00 - R20000.00 \ &= R150000.00 \end{aligned}

Next, we calculate the annual straight-line depreciation expense:

\begin{aligned} \text{Annual Depreciation Expense} &= \frac{\text{Depreciable amount}}{\text{Useful life}} \ &= \frac{R150000.00}{5} \ &= R30000.00 \end{aligned}

Therefore, the annual straight-line depreciation expense for the vehicle is $\boxed{R30000.00}$.

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