A business buys a car which costs £15,000. This price includes £500 for insurance and

£60 for car tax. The business’s name was painted on the side of the car at an additional cost of £160. The car is expected to be in use for five years, after which time it will have an estimated value of £4,600. What is the annual depreciation if the straight line method is used?

(a) (£14,600 - £4,600)/5 = £2,000

(b) (£15,160 - £4,600)/5 = £2,112

(c) (£14,440 - £4,600)/5 = £1,968

(d) (£15,000 - £4,600)/5 = £2,080