1. **State the problem:** Misha bought a machine for 39,000 with a useful life of 4 years and a residual value of 4,000. We need to find the net book value after 2 years using straight-line depreciation. 2. **Formula for straight-line depreciation:** $$\text{Depreciation per year} = \frac{\text{Cost} - \text{Residual value}}{\text{Useful life}}$$ This means the asset loses the same amount of value each year. 3. **Calculate annual depreciation:** $$\frac{39,000 - 4,000}{4} = \frac{35,000}{4} = 8,750$$ So, the machine depreciates by 8,750 each year. 4. **Calculate total depreciation after 2 years:** $$8,750 \times 2 = 17,500$$ 5. **Calculate net book value after 2 years:** $$\text{Net book value} = \text{Cost} - \text{Accumulated depreciation} = 39,000 - 17,500 = 21,500$$ **Final answer:** The net book value after two years is **shs. 21,500**.