Rae is saving for a new computer, so she's selling her old antivirus software program for $250. The software originally cost $985, and she used it for 12 years.
What was the net asset value of Rae's antivirus software two years after her purchase?
To calculate the net asset value of Rae's antivirus software two years after her purchase, we first need to determine the annual depreciation of the software.
Depreciation per year = (Initial cost - Salvage value) / Useful life
= ($985 - $250) / 12 years
= $735 / 12 years
= $61.25 per year
After two years, the value of the software would have depreciated by:
Depreciation after 2 years = $61.25 per year * 2 years
= $122.50
The net asset value of Rae's antivirus software two years after her purchase would be:
Initial cost - Depreciation after 2 years
= $985 - $122.50
= $862.50.