Rae is saving for a new computer, so she's selling her old antivirus software program for $250. The software originally cost $985, and she used it for 12 years.

What was the net asset value of Rae's antivirus software two years after her purchase?

1 answer

To calculate the net asset value of Rae's antivirus software two years after her purchase, we first need to determine the annual depreciation of the software.

Depreciation per year = (Initial cost - Salvage value) / Useful life
= ($985 - $250) / 12 years
= $735 / 12 years
= $61.25 per year

After two years, the value of the software would have depreciated by:
Depreciation after 2 years = $61.25 per year * 2 years
= $122.50

The net asset value of Rae's antivirus software two years after her purchase would be:
Initial cost - Depreciation after 2 years
= $985 - $122.50
= $862.50.