The Hotel has been in operation for 8 years. They are a popular hotel among both business and leisure guests. The hotel has decided to expand their business into catering. They have decided to purchase a catering van for $35,000. The van has a useful life of 8 years and a residual value of $4,000.

a.Using straight-line depreciation, what is the yearly and monthly depreciation expense? (2 marks)

b.Using double declining depreciation, what is the depreciation expense in Year 3? What is the net book value in Year 3 of the catering van? (4 marks)

c.In your own words, explain why the Hotel would use Double Declining Depreciation? (3 marks)