a certain car was purchased for $32,000. the car has a resale value of $26,000 after a useful life of 6…

a certain car was purchased for $32,000. the car has a resale value of $26,000 after a useful life of 6 years. what is the book value of this car after 5 years? annual depreciation expense = $1,000 book value = $? round to the nearest hundredth

a certain car was purchased for $32,000. the car has a resale value of $26,000 after a useful life of 6 years. what is the book value of this car after 5 years? annual depreciation expense = $1,000 book value = $? round to the nearest hundredth

Answer

Explanation:

Step1: Recall book - value formula

The formula for book - value is $BV = P-DE\times n$, where $P$ is the purchase price, $DE$ is the annual depreciation expense, and $n$ is the number of years. Here, $P = 32000$, $DE = 1000$, and $n = 5$.

Step2: Substitute values into formula

$BV=32000 - 1000\times5$. First, calculate $1000\times5 = 5000$. Then, $BV=32000 - 5000$. $BV = 27000$.

Answer:

$27000.00$