Annual Depreciation Expense = (Cost of the Asset - Salvage Value) / Useful Life of the Asset Question 1: Depreciation Company A purchases a machine for $315,000 with an estimated salvage value of $45,000 and a useful life of 7 years. What is the annual depreciation? Assume company A has a 27% tax rate - What is the depreciation shield each year? Round to nearest dollar. Cost Salvage Useful Life - Years Annual Depreciation Tax Rate Depreciation Shield