A Depreciable Asset That Cost $100,000 Had an Estimated Useful

question 71

Multiple Choice

A depreciable asset that cost $100,000 had an estimated useful life of 5 years and estimated residual value of $10,000. What is the first year for which depreciation would be greater under the straight-line method than under the declining-balance method with an acceleration rate of 200%?

• A) The first year.
• B) The second year.
• C) The third year.
• D) The fourth year.

---

Definitions:

Regressive Tax

A tax system in which the tax rate decreases as the taxable amount increases, disproportionately burdening lower-income individuals.

Sales Tax

A tax imposed on sales of goods and services, typically calculated as a percentage of the selling price.

Tax Rate Structure

The system or design of tax rates, which can be progressive, regressive, or proportional, determining how taxes are applied based on income or other factors.

Marginal Tax Rate

The tax rate applied to the next dollar of income, indicating how much tax will be paid on an additional dollar of earnings.