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Using the Information Below Calculate the Average Total Depreciable Life

question 9

Multiple Choice

Using the information below calculate the average total depreciable life of the assets: $\begin{array}{l}\text { Infarmaton fram the Balance Shet: }\\\begin{array} { l l l } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } \\\text { Depreciable As5ets } & \$ 2,458,600 & \$ 1,985,400 \\\text { Accumulated Depreciation } & ( 1,350,700 ) & ( 1,046,000 ) \\\text { Depreciable A55ets (Net) } & \$ 1,107,900 & \$ 939,400\end{array}\end{array}$
$Using the information below calculate the average total depreciable life of the assets: \begin{array}{l} \text { Infarmaton fram the Balance Shet: }\\ \begin{array} { l l l } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } \\ \text { Depreciable As5ets } & \$ 2,458,600 & \$ 1,985,400 \\ \text { Accumulated Depreciation } & ( 1,350,700 ) & ( 1,046,000 ) \\ \text { Depreciable A55ets (Net) } & \$ 1,107,900 & \$ 939,400 \end{array} \end{array} A) 5.8 years B) 10 years C) 2.9 years D) 5.3 years$

Definitions:

Net Fixed Assets

The value of a company's property, plant, and equipment minus depreciation, representing the actual worth of these assets to the business.

Total Assets

The sum of all current and long-term assets owned by a company, reflecting the total resources at its disposal.

Internal Growth Rate

The maximum growth rate a company can achieve with its existing assets without having to finance growth with external equity or debt.

Retention Ratio

The portion of net income that is retained by a company instead of being paid out as dividends to shareholders, usually expressed as a percentage.