If a Vehicle Was Purchased for $6,500 and Has a Residual

question 43

Multiple Choice

If a vehicle was purchased for $6,500 and has a residual value of $500,the annual depreciation expense will be $1,000 if the estimated useful life is

• A)6 years.
• B)6.5 years.
• C)7 years.
• D)13 years.

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Definitions:

Quasi-Fixed Costs

Expenses that are fixed over a certain range of production or time but can change if production or the time period changes significantly.

Positive Output

The production of a quantity greater than zero, indicating active operation or production levels in a business or economy.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total output, indicating the average cost per unit of output.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes with the level of production.