Business Equipment Is Often Depreciated Using the Double Declining-Balance Method

question 44

Multiple Choice

Business equipment is often depreciated using the double declining-balance method. In this method, a piece of equipment with a life expectancy of N years, costing C dollars, will depreciate to a value of V dollars in n years, where n is given by the formula: A computer that cost $14,000 has a life expectancy of 5 years. If it has depreciated to a value of $1,600, how old is it? Round the answer to the nearest tenth of the year.

• A) 4.2 years old
• B) 6.1 years old
• C) 2.5 years old
• D) 5.3 years old
• E) 4.7 years old

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