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:

Political Risk

The risk associated with changes in government policy which may negatively affect domestic and foreign businesses.

Disadvantage

This refers to an unfavorable condition or circumstance that reduces the chances of success or effectiveness.

Hedge

Investment made to reduce the risk of adverse price movements in an asset, often by taking an offsetting position in a related security.

Spot Rates

The current price in the marketplace at which a particular asset can be bought or sold for immediate delivery.