A Four-Year-Old Asset Is to Be Replaced as Part of a Capital

question 151

Multiple Choice

A four-year-old asset is to be replaced as part of a capital project. It originally cost $20,000 and has a depreciation (straight line) life of ten years. Its market value is currently $16,000. The firm's marginal tax rate is 34%. What is its contribution to the initial outlay?

• A)$ 2,880
• B)$14,640
• C)$14,880
• D)$ 2,640

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Definitions:

Self-Determination Theory

The theory that we feel motivated to satisfy our needs for competence, autonomy, and relatedness.

Competence

The ability or skill to do something successfully or efficiently.

Personal Control

The extent to which an individual perceives control over their environment and decisions affecting their life.

Affiliation Need

The need to build relationships and to feel part of a group.