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What is the annual depreciation expense

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Reference no: EM132558452

A company is planning to replace old equipment with new, more efficient equipment. The company spent $120,000 on a market study and consulting a few months ago. The new equipment will cost $2,200,000 and has an estimated salvage value of $400,000. In order to make the equipment operable, the company must pay $60,000 for installation and $90,000 for necessary training. With the anticipated growth due to the equipment replacement, the company has to invest $110,000 in working capital. The equipment will be depreciated via the simplified straight-line depreciation method over its 20 year life. What is the annual depreciation expense?

Reference no: EM132558452

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