Big Trucking Company has purchased a $100,000 dump truck that has a useful life of 8 years. After the first year of use, the market value of the dump truck falls to $70,000. What is the economic depreciation of the dump truck?

Question

Quizplus · Accepted Answer

Economic depreciation is calculated as the difference between the initial value of an asset and its market value after a period of use. In this case, the dump truck's value decreased from $100,000 to $70,000 in the first year, so the economic depreciation is $100,000 - $70,000 = $30,000.

Big Trucking Company Has Purchased a $100,000 Dump Truck That