Trust Engineering Company Is Considering the Purchase of a New

question 47

Multiple Choice

Trust Engineering Company is considering the purchase of a new machine to replace an existing, worn machine. The old machine was purchased five years ago at a cost of $20,000, and it is being depreciated on a straight line basis to a salvage value of zero over its 10-year life. The new machine, which costs $30,000, falls into the Modified Accelerated Cost Recovery System (MACRS) 5-year class, and it has an estimated life of five years. If the old machine is replaced with the new machine, the change in depreciation expense that will occur in Year 3 of the new machine's life will be _____. The MACRS rates for 5-year class are Year 1 - 20%, Year 2 - 32%, Year 3 - 19%, Year 4 - 12%, Year 5 - 11%, Year 6 - 6%. 

• A)$2,000
• B)$7,600
• C)$3,700
• D)$5,700
• E)$18,200

---

Definitions:

Query Window

A UI element in database software where users can type and execute SQL queries to retrieve or manipulate data.

Open

The action or process of making something accessible or available for use.

Design View

A mode in software applications that allows the user to edit or layout the document or database visually.

Structure View

An overview representation of a document’s framework, often seen in software to navigate sections or elements of a complex document or website.