Orange Corp

question 18

Multiple Choice

Orange Corp. constructed a machine at a total cost of $70 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years'-digits method. The residual value is expected to be $4 million. At the beginning of 2018, Orange decided to change to the straight-line method. Ignoring income taxes, what will be Orange's depreciation expense for 2018?

• A) $4.8 million.
• B) $5.4 million.
• C) $6.6 million.
• D) $9.4 million.

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Definitions:

Scientific Management

One of the earliest approaches to management, was concerned with structuring individual jobs to maximize efficiency and productivity.

Assembly-Line Production

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product quicker and more efficiently.

Unemployment Rates

The percentage of the labor force that is jobless and actively looking for employment.

Functional Full-Employment

A state in an economy where all job seekers find employment that matches their skills and preferences, with minimal levels of unemployment due to natural turnover.