A $240,000 Asset That Is Being Depreciated at a Rate

question 26

Multiple Choice

A $240,000 asset that is being depreciated at a rate of 10% per year and will increase a company's annual net income by $40,000 a year provides an approximate unadjusted rate of return of:

• A) 6.7%
• B) 16.7%
• C) 26.7%
• D) 29.7%

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Definitions:

Macroeconomist

An economist specializing in the study of large-scale economic factors and phenomena, including inflation, unemployment, and national income.

Foreign Competition

The competitive pressure that domestic companies face from international firms in either domestic or global markets.

Macroeconomist

An economist who specializes in macroeconomics, the branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.

Normative Statement

Statements that express an opinion or a value judgment, often involving what ought to be rather than what is.