Each electronic equipment such as computers, loses value overtime. The amount of this lost value is called depreciation. Thesimplest way to determine depreciation is as follows; If the assethas a useful life of n years, the straight-line method ofdepreciation assumes a depreciation of 1/n of the item’s valueeach year. Assume that a particular $3000 computer has a usefullife of five years. At the end of the five years, assume that ithas a scrap value of $500. Thus, the net cost of the computer is3000 – 500 = $2500, the computer depreciates $500 (= 2500 X 1/5)each of the five year
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