Essential Mathematical Formulas for PMP Certification Test
A = B + C
Example
Assume you paid $10,000 for a machine for your project and expect it to last 5 years. To calculate the yearly depreciation using straight-line depreciation, divide the cost ($10,000) by the number of years (5).
Straight-line depreciation is calculated as follows:[textAnnual Depreciation = fractextCost of AssettextUsable Life ]
Thus, in this case: [textAnnual Depreciation = frac$10,0005 text years = $2,000 text per year]
As a result, using straight-line depreciation, you’d record $2,000 as the machine’s yearly depreciation charge in your project’s accounting. This strategy uniformly distributes the asset’s cost throughout its estimated useful life, allowing for a systematic manner to account for the asset’s value loss over time.
