A Plant Asset Cost ₤256,000 and Is Estimated to Have

question 46

Multiple Choice

A plant asset cost ₤256,000 and is estimated to have a ₤32,000 residual value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be

• A) ₤21,440.
• B) ₤36,000.
• C) ₤31,500.
• D) ₤28,000.

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Definitions:

Market Rate

The prevailing price or interest rate available in the marketplace for goods, services, or financial assets.

Interest

Interest is the cost of borrowing money, typically expressed as a percent of the amount borrowed, paid by the borrower to the lender.

Interest Rate

The percentage of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Expected Rate

The anticipated return or yield on an investment, often based on historical data or forecasts of future trends.