A Firm Is Considering Purchasing Two Assets

question 88

Multiple Choice

A firm is considering purchasing two assets.Asset A will have a useful life of 12 years and cost $3 million; it will have installation costs of $400,000 and a salvage or residual value of $400,000.Asset B will have a useful life of 8 years and cost $2.5 million; it will have installation costs of $300,000 and a salvage or residual value of $800,000.Which asset will have a greater annual straight-line depreciation?

• A)Asset A has $30,000 more in depreciation per year.
• B)Asset A has $37,500 more in depreciation per year.
• C)Asset B has $30,000 more in depreciation per year.
• D)The depreciation per year is the same for each asset.

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Definitions:

Supervisor-subordinate

The dynamic relationship between a manager or leader and their direct reports, characterized by guidance, oversight, and performance evaluation.

Vertical Conflict

Conflict that arises between different levels of an organizational hierarchy, such as between management and staff, often due to miscommunication or differing objectives.

Authoritative Command

A leadership style characterized by clear direction and expectations while allowing input and respecting subordinates.

Domain Ambiguities

Unclear boundaries or definitions within a specific area of knowledge or expertise.