Cost of an Asset Is $1,000,000 and Its Residual Value

question 127

Multiple Choice

Cost of an asset is $1,000,000 and its residual value is $100,000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the double-declining-balance method of depreciation.

• A)$450,000
• B)$500,000
• C)$250,000
• D)$225,000

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Definitions:

Deviations

Differences between observed values and some reference value, often the mean of the dataset.

Standard Deviation

A gauge for assessing the spread or differentiation of values within a group of data points.

Variance

A measure of the spread of a set of values, calculated as the average of the squared deviations from the mean.

Population Mean

The average of all the values in a population, calculated by summing all the values and dividing by the count of values.