Avatar,Inc

question 35

Multiple Choice

Avatar,Inc.bought a machine on January 1,2011 for $96,000.The machine is expected to last for 8 years,after which it will be worthless.How much depreciation expense will Avatar show on its income statement for the year ended December 31,2011?

• A)$96,000
• B)$16,000
• C)$12,000
• D)$0.Depreciation expense does not appear on the income statement.

---

Definitions:

Implied Share Price

The calculated value of a company's share based on future earnings, cash flows, or market expectations.

Implied Share Price

The theoretical price of a company's stock derived from certain financial models, reflecting the market's expectations of its future cash flows or earnings.

Earnings Multiple

A valuation ratio that compares a company's current share price to its per-share earnings, commonly used to gauge stock prices.

Abnormal Earnings

Earnings that are above or below the normal or expected level due to unusual circumstances or events.