An oil company is buying a semi-submersible oil rig for $15 million. Additionally, it will cost to move the oil rig to the oil-field and to prepare it for operations. If it is depreciated over five years using straight-line depreciation, what are the yearly depreciation expenses in this case?

Question

An oil company is buying a semi-submersible oil rig for $15 million. Additionally, it will cost  to move the oil rig to the oil-field and to prepare it for operations. If it is depreciated over five years using straight-line depreciation, what are the yearly depreciation expenses in this case?

Quizplus · Accepted Answer

C) $(15 + 1.5) / 5 = $3.3 million

An Oil Company Is Buying a Semi-Submersible Oil Rig for $15