An Oil Company Is Buying a Semi-Submersible Oil Rig for $20

question 23

Multiple Choice

An oil company is buying a semi-submersible oil rig for $20 million.Additionally,it will cost $1.5 million to move the oil rig to the oil-field and to prepare it for operations.If it is depreciated over five years using straight-line depreciation,what are the yearly depreciation expenses in this case?

• A)$3.8 million
• B)$4.0 million
• C)$4.3 million
• D)$5.0 million

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Definitions:

Wear Indicating Device

A feature built into a brake pad or tire that provides a visual or audible warning when the component has worn down to its replacement limit.

Retraction Mechanism

A system designed to withdraw or pull back a part or component, commonly found in devices like seat belts or retractable pens.

Pad Wear

The natural wear and tear on brake pads over time due to friction when the brakes are applied, affecting brake performance and safety.

Brake Warning Light

An indicator on a vehicle's dashboard designed to alert the driver of issues within the braking system, such as low brake fluid level or a malfunction in the braking system.