A Machine Is Purchased for $120 000

question 18

Multiple Choice

A machine is purchased for $120 000.It is estimated that it has a useful life of 4 years and will then be sold for $8000.Using the straight-line method the carrying value of the machine at the end of the third year of the machine's useful life is:

• A)$28 000
• B)$42 000
• C)$36 000
• D)$60 000

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Definitions:

Yield Income

Income generated from investments that pay out returns, such as dividends from stocks or interest from bonds.

Investment Project

An initiative to allocate resources with the expectation of achieving future returns.

Present Discounted Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to calculate the present value of future earnings or obligations.

Future Income

Expected earnings or revenue that an individual or business anticipates receiving in the future.