A Machine Is Purchased for $130 000

question 12

Multiple Choice

A machine is purchased for $130 000.It is estimated that it has a useful life of 8 years and will then be sold for $10 000.Using the straight-line method calculate the amount of depreciation to be charged for each year of useful life.

• A)$1625
• B)$10 000
• C)$16 250
• D)$15 000

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Definitions:

Issuing Securities

The process of offering new stocks or bonds to the public or existing shareholders to raise capital.

Legal Fees

Charges for the professional services provided by lawyers or attorneys.

Abnormal Returns

Returns on a stock or portfolio that exceed the benchmark or expected return based on the risk assessment.

Rights Offering

A method by which a company offers new shares to its existing shareholders in proportion to their existing holdings, typically at a discount to the market price.