If a machine has a class life of 5 years and a cost of $140,000, what is the annual depreciation expense?

To determine the annual depreciation expense for a machine with a class life of 5 years and a cost of $140,000, we can use the straight-line depreciation method. This method allocates the cost of an asset evenly across its useful life.

First, we need to divide the total cost of the machine by its useful life:

Annual Depreciation Expense = Cost of the Machine / Useful Life

In this scenario:

Annual Depreciation Expense = $140,000 / 5 years = $28,000

By calculating this, we find that the machine will depreciate by $28,000 each year over its useful life of 5 years. This method is commonly used because it provides a simple and systematic approach to accounting for asset depreciation.

Thus, the correct answer demonstrates understanding of basic financial principles, particularly how to apply straight-line depreciation to determine an asset's annual expense over its lifespan.