What Would Be the Accumulated Depreciation Balance at the End

question 38

Multiple Choice

What would be the accumulated depreciation balance at the end of year 5 for a piece of equipment using the straight-line method when the cost is $12,000, residual value is $1,300, and the expected life is 11 years? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

• A) $5,455
• B) $4,864
• C) $973
• D) $5,836

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Definitions:

Interest Rates

The cost of borrowing money or the return on an investment, usually expressed as a percentage per annum.

Yield Curve

A graphical representation of the interest rates on debts for a range of maturities, showing the relationship between interest rates and the term of the debt.

Expectations Theory

A theory suggesting that the interest rates on long-term bonds will reflect expected future short-term rates.

Forward Rates

The interest rates implied by current zero-coupon bond prices for periods in the future.