Under CCA, an Asset Which Originally Cost $100,000 Is Being

question 151

Multiple Choice

Under CCA, an asset which originally cost $100,000 is being depreciated using a 4% CCA rate. Thedepreciation expense in year 1 is___________ .

• A) $4,000
• B) $6,000
• C) $2,000
• D) $0

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Definitions:

Straight-Line Method

A depreciation technique in which an asset's cost is evenly reduced over its useful life, assuming constant use and value decline.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debt obligations over a period.

Par Value

The stated value of a financial instrument such as a bond or stock share, as declared by the issuer.

Market Rate

The current price or cost of a good, service, or financial instrument in the marketplace.