The factors used to compute depreciation expense are an asset's:

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Depreciation expense is calculated using an asset's cost, residual value, and service life. Cost is the original purchase price of the asset, residual value is the estimated amount that the asset is expected to be worth at the end of its useful life, and service life is the estimated period of time that the asset will generate revenue for the company. Fair market value and economic life are not used to calculate depreciation expense, and replacement value is not necessarily relevant to calculating the depreciation expense.

The Factors Used to Compute Depreciation Expense Are an Asset's