On January 1, 2010, Mena Co

question 104

Multiple Choice

On January 1, 2010, Mena Co. purchased a new machine for $2,000,000. The machine has an estimated useful life of 5 years and a salvage value of $200,000. Mena uses the double-declining-balance method of depreciation. The amount of depreciation expense for 2012 is

• A) $480,000
• B) $288,000
• C) $432,000
• D) $259,200

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Definitions:

Investment Center

A division or unit within a company for which the manager has responsibility for and authority over the unit's revenues, costs, and investments.

Decentralized Units

Subdivisions within a larger organization that operate with a degree of autonomy, often making their own decisions and managing their own operations.

Authority

Authority refers to the power or right given to an individual or organization to make decisions, direct others, and enforce obedience.

Profit Margin

A financial metric indicating the percentage of income left over from revenues after accounting for costs and expenses.