What is the appropriate annual depreciation charge

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Question - Best Ltd purchased a building on a prime central business district site for $2 000 000. The value of the land is considered to be $1 000 000. The useful life of the building is expected to be 25 years after Best Ltd spends a further $500 000 on improvements. The residual value of the building at that time is estimated to be $250 000. The benefits from owning the land and building are expected to be derived evenly. What is the appropriate annual depreciation charge? (Use the straight-line method of depreciation.)

a. $90000

b. $70,000

c. $50,000

d. $30,000

Reference no: EM132641496

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