Choose the One Alternative That Best Completes the Statement or Answers

question 189

Multiple Choice

Choose the one alternative that best completes the statement or answers the question.
-A new piece of equipment cost a company $54,000. Each year, for tax purposes, the company depreciates the value by 25%.What value should the company give the equipment after 8 years?

• A) $7,208
• B) $1
• C) $3
• D) $5,406

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Definitions:

Least-Cost Combination

A production point where the mix of inputs results in the lowest possible cost for a given output level.

Input Prices

The prices of the resources (like labor, materials, and capital) used in the production of goods or services.

User Cost

The cost of using a resource, which includes the opportunity cost of not keeping the asset intact or not using it for an alternative purpose.

Rental Rate

Cost per year of renting one unit of capital.