Depreciation of construction equipment is best described as:

Explanation

Depreciation allocates the cost of a long-lived asset across the years that use it, and no money leaves the business when the entry is made, which is why it reduces book profit without touching cash. The loan payment is a separate cash event and is unrelated to the schedule: an asset bought outright is still depreciated. A rise in market value is appreciation, the opposite direction. And depreciation belongs to overhead unless the machine is charged out to one job by the hour, in which case it reaches the job as equipment cost rather than as depreciation.