Hwan wants to compare straight-line depreciation amounts with declining balance depreciation amounts to determine which method is more favorable for his company's balance sheet. In the range D6:D8, he estimates that the hardware for the new product will have $478,000 in tangible assets at startup, and that the useful life of these assets is six years with a salvage value of $75,650.
Start by calculating the straight-line depreciation amounts as follows:
a. In cell C12, enter a formula using the SLN function to calculate the straight-line depreciation for the product hardware during the first year.
b. Use absolute references for the cost, salvage, and life arguments in the SLN formula.
c. Fill the range D12:H12 with the formula in cell C12 to calculate the annual and cumulative straight-line depreciation in Years 2–6.
