Compute the Fair Value of the Foreign Currency Option at December

question 44

Multiple Choice

Compute the fair value of the foreign currency option at December 31, 2018.

• A) $6,000.
• B) $4,500.
• C) $3,000.
• D) $7,500.
• E) $1,500.

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Definitions:

Units-Of-Production

A depreciation method that allocates an asset's cost based on its usage, output, or production, rather than the passage of time.

Modified Accelerated Cost Recovery System

A method of depreciation applied in the United States that allows for the accelerated write-off of property under the tax code.

Periodic Depreciation Expense

The allocated portion of the cost of a tangible asset over its useful life, recognized as an expense in a specific accounting period.

Double Declining-Balance Method

A method of accelerated depreciation where an asset's value is reduced at double the rate of its straight-line depreciation.