ACCA · Question 02 · Tangible Non-Current Assets
Section A
Cobalt Extraction Co operates a deep-sea mining vessel. The vessel cost $50 million and has a useful life of 20 years. By law, the vessel must undergo a major environmental safety overhaul every 5 years. The estimated cost of the first overhaul is $10 million, which was included in the initial $50 million cost.
What is the total depreciation charge for the vessel in its first year of operation?
Answer options:
$2.5 million
$3.0 million
$4.0 million
$4.5 million
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