A Company Purchased Office Equipment for $30,000 and Estimated a Salvage

question 12

Multiple Choice

A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at the end of its 10-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

• A) 10%.
• B) 15%.
• C) 20%.
• D) 2%.

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Definitions:

Interest Rate

The percentage at which interest is charged or paid for the use of money, often expressed annually.

Investment Options

Various financial assets or vehicles in which individuals or entities can invest money with the expectation of achieving a return.

Rule Of 70

A rule estimating the number of years required to double an investment or population at a particular annual growth rate, calculated by dividing 70 by that growth rate.

Interest Rate

The financial charge for borrowing resources, represented as a percentage of the initial loan amount.