A Machine Was Purchased for $37,000 and Depreciated for 5

question 73

Essay

A machine was purchased for $37,000 and depreciated for 5 years on a straight-line basis under the assumption it would have a 10-year life and a $1,000 residual value.At the beginning of the machine's sixth year,it was recognized that it had 3 years of remaining life left,instead of five,and that at the end of the 3 years its residual value would be $1,600.What should the annual depreciation be for the machine's remaining years?

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Definitions:

Price Leadership

A pricing strategy where one leading company sets the price of products or services, and other competitors in the market follow.

General Motors

An American multinational corporation headquartered in Detroit that designs, manufactures, markets, and distributes vehicles and vehicle parts.

Price Leadership

A situation where the leading firm in an industry establishes the price of products or services, and competitors follow.

Product Differentiation

The process used by businesses to distinguish their products from similar offerings by competitors to attract a specific target market.