Suppose a Tractor Purchased at a Price of $60,000 Is

question 177

Multiple Choice

Suppose a tractor purchased at a price of $60,000 is to be depreciated by the double declining-balance method over a 10-year period. It can be shown that the rate at which the book value will be decreasing is given by ​ ​
Dollars/year at year t. Find the amount by which the book value of the tractor will depreciate over the first 4 years of its life. Please round the answer to the nearest cent.
​

• A) $44,258.76
• B) $34,481.40
• C) $29,465.81
• D) $32,210.13
• E) $34,360.97

---

Definitions:

Van

A type of vehicle used for transporting goods or people, typically larger than a common car but smaller than a truck.

Lump-sum Purchase

The acquisition of an asset or multiple assets in a single transaction for a single amount, instead of making payments over time.

Straight-line Method

A method of calculating depreciation and amortization by evenly distributing the cost of an asset over its useful life.

Salvage Value

The projected value at which an asset can be sold after its period of usefulness, utilized in the computation of depreciation costs.