A Machine That Was Purchased on January 1 for $45,000

question 14

Multiple Choice

A machine that was purchased on January 1 for $45,000 has an estimated salvage value of $9,000. If the machine's depreciation rate is 20%, its annual depreciation is

• A) $9,000.
• B) $36,000.
• C) $7,200.
• D) $10,800.

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Definitions:

Income

The monetary payment received for goods or services, or the earnings from investment over a particular period of time.

Equity Financing

The sale of shares of stock in exchange for cash.

Shares Of Stock

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Cash

Physical or digital money in hand or readily available for transactions or use.