Answer:
The annual depreciation cost the facility will rise by 10% or $4,000,000.
Explanation:
Annual depreciation = [tex]\frac{Cost of equipment - Estimated salvage value}{Useful life}[/tex]
Annual depreciation = [tex]\frac{40 - 0}{10}[/tex]
Annual depreciation = 10% or $4,000,000
The annual depreciation cost where the facility will rise by 10% or $400,000.
Since
Annual depreciation = (Cost - salvage value) / useful life
= (40 - 1) / 10
= 40 / 10
= 10% or $400,000
hence, The annual depreciation cost where the facility will rise by 10% or $400,000.
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