A Firm Is Considering Purchasing an Asset That Will Have

question 90

Multiple Choice

A firm is considering purchasing an asset that will have a useful life of 15 years and cost $7.5 million; it will have installation costs of $300,000 and a salvage or residual value of $1,800,000.What is the annual straight-line depreciation for this asset?

• A)$400,000 per year
• B)$422,000 per year
• C)$498,750 per year
• D)$530,450 per year

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Definitions:

Ethical Issue

A situation or problem that requires individuals or organizations to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical).

Marketing Mix

A set of actionable marketing tools—product, price, place, and promotion—that a business uses to pursue its marketing objectives in the target market.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees.

Supply Chain

The network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and eventually to the end user.