How is depreciation per year calculated in the provided example?

The correct answer reflects the appropriate method for calculating annual depreciation for an asset, like a truck, over its useful life. The formula used here accounts for the total cost incurred when acquiring the asset while also recognizing its expected resale value or trade-in value at the end of its useful life.

By subtracting the trade-in value from the total purchase price, you're determining the total depreciation that will occur over the asset's life. This amount is then divided by the truck's age—usually expressed in years—to allocate the depreciation expense evenly over that period. This method ensures a more accurate representation of the asset's declining value, aligning with accounting principles such as the matching principle, which states that expenses should correspond with revenue over time.

The other approaches presented do not correctly capture the full depreciation process or fail to consider essential factors needed for an accurate calculation. Thus, the chosen method accurately reflects standard practices of asset valuation and depreciation calculation in financial accounting.