A Government Reported Expenditures for Infrastructure as Follows: $20 Million

question 62

Multiple Choice

A government reported expenditures for infrastructure as follows: $20 million for improvements and additions; $18 million to extend the life of existing infrastructure; $16 million for general repairs.The cost of its infrastructure,excluding land,is $750 million,and the infrastructure has an estimated life of 50 years,on average.Which of the following would be the reported expense (in millions) under each of the following options?

• A) Depreciation Approach: $53; Modified Approach: $34
• B) Depreciation Approach: $49; Modified Approach: $31
• C) Depreciation Approach: $31; Modified Approach: $31
• D) Depreciation Approach: $31; Modified Approach: $34