Straight-Line Depreciation. A company buys anoffice machine for $5200 on January 1 of a

Chapter 8, Problem 52

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Straight-Line Depreciation. A company buys anoffice machine for $5200 on January 1 of a givenyear. The machine is expected to last for 8 years,at the end of which time its trade-in value, orsalvage value, will be $1100. If the companysaccountant figures the decline in value to be the "same each year, then its book values, or salvagevalues, after t years, 0 t 8, form an arithmeticsequence given byat = C - t aC - SNb,where C is the original cost of the item ($5200),N is the number of years of expected life (8), andS is the salvage value ($1100).a) Find the formula for at for the straight-linedepreciation of the office machine.b) Find the salvage value after 0 year, 1 year,2 years, 3 years, 4 years, 7 years, and 8 years."