ARAMCO company purchases factory machine at a cash price of $100,000. Related expenditures are sales taxes $3000, Insurance after the installation is $6000 and Installation and testing $1,500. The machine has an estimated useful life of 6 years and salvage value is $2,000.

1. Compute the cost component of the machine.

2. Compute the total costs of the machine.

3. Using straight line method, how much will be the annual depreciation cost?

4. Compute the book value of the machine at the end of the 4^th year?