On January 1, 2018, Schmidt Industries purchased a new paint sprayer for $400,000. The salvage value after 5 years is estimated to be $100,000. If the sprayer is depreciated by straight line depreciation for 5 years, what is the annual depreciation expense?

• $0, as the sprayer is not depreciable
• $60,000
• $80,000
• $400,000, as the sprayer can be fully depreciated in year 1