Question

depreciation of machinery
a graph shows the straight-line depreciation of a piece of machinery with a useful life of 10 years.
depreciation of machinery
graph with amount ($) on y-axis (20,000; 15,000; 10,000; 5,000) and time (years) on x-axis (2, 4, 6, 8, 10), red line from (0,20,000) to (10,0)
what is the initial value of the machinery?
$2,000
$20,000
$10
$0

Explanation:

Step1: Identify the initial time

The initial time for the machinery's depreciation is at year 0 (when time starts, before any depreciation has occurred over the years).

Step2: Find the amount at time 0

Looking at the graph, when the time (x - axis) is 0 years, the amount (y - axis) of the machinery is at the point (0, 20000). This represents the value of the machinery at the start (initial value) before any depreciation has taken place over the 10 - year useful life.

Answer:

\$20,000