Fred Meyer wishes to exchange a unique piece of machinery usedin its operations. Fred Meyer has received three offers from othercompanies in the industry, each of which lacks commercialsubstance:
Oryx Energy offered to exchange a Franklin desalination watersystem, and pay $20,900.
Sara Lee offered to exchange a Komatsu 120-ton truck, and pay$62,600.
Dyna-Flex offered to exchange a Massey-Ferguson front-loader, andpay $19,800.
Information concerning each of the assets to be exchanged is notedbelow:
| Cost | Accum Depn | Fair Value |
| Fred Meyer--unique piece of machinery | $ 330,000 | $ 265,000 | $ 181,200 |
| Oryx Energy--Franklin desalination water system | 265,000 | 182,300 | 160,300 |
| Sara Lee--Komatsu 120-ton truck | 330,000 | 265,000 | 118,600 |
| Dyna-Flex--Massey-Ferguson front-loader | 150,000 | 65,000 | 161,400 |
Based on the three offers above and assuming Fred Meyer uses thestraight-line method of depreciation with a salvage value of $1,100an estimated useful life of 11 years, what is the annualdepreciation expense of the exchanged asset that produces the leastamount of depreciation expense for Fred Meyer in future years?
