An Asset Costs $80 000 and Has a Residual Value

question 67

Multiple Choice

An asset costs $80 000 and has a residual value of $7 000. It has a four- year life. Using reducing- balance depreciation, Year 2 depreciation would be:

• A)$15 437.50.
• B)$15 000.00.
• C)$18 250.00.
• D)$19 845.84

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Definitions:

Turnover

Turnover refers to the total volume of shares or securities traded within a particular timeframe or the rate at which inventory is sold and replaced in a business.

Fama-French Model

A three-factor model developed for explaining asset prices and their returns, incorporating market risk, the size effect, and the value effect.

Benchmarking Performance

The process of comparing the performance of one's investments or company to a standard or a set of standards.

Rational Risk Factors

Factors based on economic theory that affect asset prices and can predict future investment returns, assuming that market participants act rationally.