What Would the Book Value Be at the End of Year

question 107

Multiple Choice

What would the book value be at the end of year 3 for a computer system using the straight-line method when cost is $5,000,residual value is $1,000,and the expected life is 4 years?

• A)$2,000
• B)$1,500
• C)$1,250
• D)$1,000

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Definitions:

Net Cash

The amount of cash available after all cash inflows and outflows have been accounted for, typically within a specific period.

Operating Activities

Activities that relate to the primary operations of a company, such as selling products or providing services, as opposed to financing or investing activities.

Investing Activities

Financial transactions involving the purchase or sale of long-term assets and investments.

Net Cash

The amount of cash and cash equivalents minus any liabilities or financial obligations.