Real Estate Math
A building has a replacement cost of $500,000 and is 30 years old with an estimated 50-year useful life. Using straight-line depreciation, what is the accrued depreciation?
A$100,000
B$150,000
C$300,000✓ Correct
D$200,000
Explanation
Annual depreciation = $500,000 ÷ 50 years = $10,000/year. Accrued depreciation for 30 years = $10,000 × 30 = $300,000. Depreciated value = $500,000 - $300,000 = $200,000.
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