Solution:

The straight-line depreciation formula is:

$\text{Depreciation Expense per Year} = \frac{\text{Cost of Asset} - \text{Salvage Value}}{\text{Useful Life}}$

Given:

• Cost of the machine ($C$) = $227,000
• Salvage value ($S$) = $30,000
• Useful life ($n$) = 8 years

$\text{Depreciation Expense per Year} = \frac{227,000 - 30,000}{8}$

Calculation:

$\text{Depreciation Expense per Year} = \frac{197,000}{8} = 24,625$

Final Answer:

Each year's depreciation expense is $24,625.

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Do you have any questions or want further explanation?

Here are 5 follow-up questions you might consider:

1. How does straight-line depreciation compare to other methods like declining balance?
2. How would the depreciation expense change if the salvage value were higher or lower?
3. What is the impact of depreciation on the company's taxable income?
4. How does the tax rate affect the after-tax savings from depreciation?
5. What if the machine's useful life was estimated incorrectly? How would that change the calculation?

Tip: Always confirm asset salvage values and useful lives periodically, as changes may require adjusting depreciation schedules.