If a Machine Cost $50,000 Initially and Is Expected to Last

question 129

Multiple Choice

If a machine cost $50,000 initially and is expected to last for 20 years but is worth $60,000 after one year because it is in short supply, an accountant most likely would say that:

• A) the machine's cost for each of its 20 years of existence is $2,500.
• B) the machine's cost for each of its 20 years of existence is $3,000.
• C) during the first year the machine had no cost; it provided a revenue to the firm.
• D) the value of the machine will continue to increase 20 percent per year for the next 20 years.

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Definitions:

Pneumatic Brake Systems

Brake systems that utilize compressed air to generate the force applied to the brake pads or shoes, common in heavy-duty vehicles.

Compressibility of Air

A property of air that allows it to decrease in volume under pressure, playing a critical role in various pneumatic systems and applications.

6S/6M Highway Tractor ABS

Refers to an Anti-lock Braking System with 6 sensors and 6 modulators used on highway tractors to prevent wheel lockup during braking.

Accident Avoidance Electronics

Integrated systems in vehicles designed to prevent or reduce the severity of an accident through technologies like automatic braking, lane-keeping assist, and collision warnings.