The Asset Section of the January 1, 20X9, Balance Sheet

question 43

Multiple Choice

The asset section of the January 1, 20X9, balance sheet of Junction Company includes a machine which was acquired on January 1, 20X5.The machine's original cost was $500,000, and the estimated life was determined to be 10 years.The estimated economic profit was zero, and the straight-line method of depreciation was chosen.If operating income before depreciation is $95,000, the rate of return on gross book value for 20X9 is _____.

• A)9%
• B)14.4%
• C)18%
• D)35%

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Definitions:

Diagnosis

The identification of the nature and cause of something, often relating to illness or medical conditions, through examination of the symptoms.

Compulsion

A strong, usually irresistible impulse to perform an act, especially one that is irrational or contrary to one's will.

Obsession

A persistent, unwanted, and intrusive thought or urge that causes significant anxiety or distress.

Phobia

An extreme or irrational fear or aversion to a particular object, situation, or activity, significantly impacting an individual's life.