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posted by Anonymous

A car was purchased for \$10,000 with a salvage value of \$4000. It is expected to have a useful life of 5 years. Using the sum-of-years method, find the car's value in the first year after the purchase.

1. Reed

The car is expected to decrease in value \$6,ooo in five years (10,000 - 4,000). How much is that per year? Then subtract the yearly depreciation from the purchase price to find the value at the end of the first year.

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