Donovan knows that the useful life of the computer he has purchased is 5 years. He bought the computer for $5,500. Its salvage value is $800. How much can Donovan write off as a depreciation expense each year?

To calculate the annual depreciation expense for Donovan's computer, we can use the straight-line depreciation method. 1. **Determine the cost of the computer**: $5,500 2. **Determine the salvage value**: $800 3. **Determine the useful life**: 5 years The formula for straight-line depreciation is: \[ \text{Annual Depreciation Expense} = \frac{\text{Cost} - \text{Salvage Value}}{\text{Useful Life}} \] Plugging in the numbers: \[ \text{Annual Depreciation Expense} = \frac{5500 - 800}{5} \] \[ \text{Annual Depreciation Expense} = \frac{4700}{5} \] \[ \text{Annual Depreciation Expense} = 940 \] So, Donovan can write off $940 as a depreciation expense each year.