If Jin-Ho Buys a Personal Computer to Maintain Household Financial

question 182

Multiple Choice

If Jin-Ho buys a personal computer to maintain household financial records and prepare budgets, he

• A)will spend less time in nonmarket work
• B)will spend more time engaged in leisure activities
• C)will increase the productivity of market work
• D)is less likely to hire tax preparation services on the market
• E)is less likely to prepare his own income tax returns at home

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Definitions:

Book Value

Represents the value of an asset according to its balance sheet account balance, calculated as the original cost less any depreciation, amortization, or impairment costs.

Salvage Value

The projected remaining value of an asset when it reaches the end of its operational lifespan.

Residual Value

The estimated value of an asset at the end of its useful life.

Double Declining-balance

An accelerated method of depreciation where the book value of an asset is reduced at double the rate of its straight-line depreciation each year.