An Asset Costs $80,000 and Has a Salvage Value of $7,000.It

question 42

Multiple Choice

An asset costs $80,000 and has a salvage value of $7,000.It has a four-year life.Using double-declining-balance depreciation,Year 1 depreciation would be:

• A) $20,000.
• B) $40,000.
• C) $18,250.
• D) $36,500.

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Definitions:

Total Assets Ratio

Total assets ratio is a financial metric used to assess a company's efficiency in using its assets to generate revenue.

Net Income

The net income a company earns once all expenses and taxes are subtracted from the total revenue.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet account balances to calculate cash flow from operating activities.