A company is planning to replace old equipment with new, more efficient equipment. The company spent $120,000 on a market study and consulting a few months ago. The new equipment will cost $2,200,000. In order to make the equipment operable, the company must pay $60,000 for installation and $90,000 for necessary training. With the anticipated growth due to the equipment replacement, the company has to invest $110,000 in working capital. The equipment will be depreciated via the straight-line depreciation method down to $400,000 over 20 years. What is the annual depreciation expense? $97,500 $90,000 $117,500 $103,000 $109,000