Cost Recovery (Depreciation) is the periodic allocation of the cost of the portion of an asset that wears out. The annual cost recovery calculation is used on the CFAW. The allocation of basis must be used to calculate the Cost Recovery Value (you might look at the Cost Recovery Data section on the CFAW and Slides 43 - 46 of Cash Flow Model PowerPoint to refresh your memory). Calculate the Cost Recovery Value using the following assumptions:

Purchase Price $1,400,000

Acquisition Costs $20,000

Assessed Land Value $300,000; Assessed Improvement Value $700,000

	1.	$980,000
	2.	$994,000
	3.	$36,142
	4.	$1,420,000