On January 1,2013,a Company Buys a Truck for $42,000 Cash

question 57

Multiple Choice

On January 1,2013,a company buys a truck for $42,000 cash.It has estimated residual value of $2,000,and an estimated life of 4 years,or 200,000 miles.Assume the company uses units-of-production depreciation.The truck drove 40,000 miles in 2013,60,000 miles in 2014,80,000 miles in 2015,and 20,000 miles in 2016.What is the depreciation rate?

• A) $4.00/mile
• B) $0.21/mile
• C) $0.20/mile
• D) $0.25/mile

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.