Consider an Asset That Was Separated into Its Main Components

question 7

Multiple Choice

Consider an asset that was separated into its main components (A, B, and C) . The $1,200,000 purchase price was allocated to these components in equal proportions. The useful lives are 12, 4, and 7 years for components A, B, and C respectively. Components A and B are not expected to have any residual value, but Component C is expected to have a residual value of $18,000. Assuming straight-line depreciation, total annual depreciation expense, to the nearest dollar, relating to these assets is

• A) $100,100.
• B) $125,120.
• C) $187,905.
• D) $190,476.

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Definitions:

Quarterly Demand

The total quantity of a good or service that consumers are willing and able to purchase at a given price over the span of three months.

Per Capita Consumption

Measures the average amount of a good or service consumed per person within a population over a specific period.

Consumer Surplus

The discrepancy between the sum consumers intend to pay for a product or service and the sum they really pay.

Power Transmission Wire

Conductors used in power transmission systems to carry electricity over long distances from power plants to electrical substations.