LINEAR DEPRECIATION OF AN ASSET In computing income tax, businesses are allowed by law to depreciate certain assets such as buildings, machines, furniture, and automobiles over a period of time. Linear depreciation, or the straightline method, is often used for this purpose. Suppose an asset has an initial value of $C and is to be depreciated linearly over n years with a scrap value of $S. Show that the book value of the asset at any time t(0 ≤ t ≤ n) is given by the linear function
Hint: Find an equation of the straight line that passes through the points (0, C) and (n, S). Then rewrite the equation in the slope-intercept form.
Want to see the full answer?
Check out a sample textbook solutionChapter 2 Solutions
Applied Calculus for the Managerial, Life, and Social Sciences (MindTap Course List)