Dragoo Building Inc

question 123

Multiple Choice

Dragoo Building Inc.has a crane with a book value of $240,000 and a four-year remaining life.A new crane is available at a cost of $615,000.Dragoo can also receive $48,000 for trading in the old pump.The new crane will reduce variable costs by $145,000 per year over its four-year life.The total impact to Dragoo over the crane's four-year life is:

• A)Increase of $13,000.
• B)Increase of $23,000.
• C)Decrease of $13,000.
• D)Decrease of $615,000.
• E)Decrease of $48,000.

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Definitions:

Cinnamon Buns

A sweet pastry that consists of a rolled sheet of dough upon which a cinnamon and sugar mixture is spread before being rolled into a log shape and sliced into individual portions that are baked.

Bagels

A dense, doughnut-shaped bread roll, typically boiled before being baked, originating from the Jewish communities of Poland.

Unjust Enrichment

A legal principle stating one party should not be allowed to profit at another's expense without making restitution for the fair market value of any benefits received.

Legal Obligations

Duties enforced by law that a person or entity is required to fulfill.