In the ambulance ARR scenario, what is the annual depreciation expense?

• A. -20,000
• B. -30,000
• C. -40,000
• D. -50,000

Answer: (B)

Depreciation spreads the cost of an asset over its useful life using a straight‑line method. The annual depreciation is calculated as (cost minus salvage value) divided by the asset’s useful life. In the ambulance ARR scenario, using the given values: cost 300,000, salvage value 30,000, and useful life 9 years, the calculation is (300,000 − 30,000) / 9 = 270,000 / 9 = 30,000 per year. Depreciation is shown as an expense, so it appears as a negative amount, meaning -30,000. This reflects the annual allocation of the ambulance’s cost to expense, without implying a cash outflow. The other options would require different cost, salvage, or life assumptions not present in this scenario.