A piece of equipment with a cost of $1,000,000and a residual value of $200,000, has an estimated useful life of 50 years, and is depreciated using the straight-line method.

a) What is the depreciation per year?

b) What is the book value of the equipment after the 20th year of use?

c) At thebeginningof the 21st year of use, management decided that the residual value should be changed to $180,000 and that 25 years was a reasonable estimate of the equipment's remaining useful life.