Straight-Line Depreciation Is an Accounting Method Used to Help Spread

question 63

Short Answer

Straight-line depreciation is an accounting method used to help spread the cost of new equipment over a number of years. It takes into account both the cost when new and the salvage value, which is the value of the equipment at the time it gets replaced. The function where V is value and t is time in years, can be used to find the value of a large copy machine during the first 4 years of use. What is the value of the copier after 1 years and 6 months? $__________

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Definitions:

Discretionary Cost

Costs that are not essential for the operation of a home or business and can be adjusted or eliminated depending on financial circumstances.

Condensed Income Statement

A simplified financial statement that summarizes revenues, costs, and expenses to show a company's net income over a specific period.

Discontinuance

The action of stopping the production or sale of a product or service, often as a result of strategic business decisions.

Fixed Costs

Costs that tend to remain the same in amount, regardless of variations in the level of activity.