How is final depreciation value calculated from initial value?

Calculating the final depreciation value from the initial value involves taking into account both the initial cost of the asset and its expected residual or trade-in value after being in service for a period of time. The method outlined in the correct answer focuses on determining the depreciation based on the usage of the asset over time.

This approach involves subtracting the trade-in value—which represents the value that the asset retains after its useful life—from the initial value. By then dividing this result by the number of years of use, you derive the annual depreciation. This method effectively accounts for the decline in value incurred as the asset ages, allowing one to track how much value is lost annually.

The other options do not accurately reflect the calculation of final depreciation value: some involve adding costs or using irrelevant metrics that do not directly contribute to understanding how depreciation reduces the value of an asset over time. Option B is thus the correct method for calculating final depreciation, as it provides a clear framework for understanding the asset's value retention after a certain period of use.