A company has estimated the useful life of their automobiles as 5 years. If the company purchases an automobile on January 1 for $40,000 and determines it could be sold for $2,500 at the end of the useful life.

If the company has a year-end of December 31 and uses the straight-line method of depreciation, the book value of the automobile at the end of year 2 would be:

a. $32,000.

b. $25,000.

c. $15,000.

d. $24,000.