A Depreciable Asset Currently Has a $40,100 Book Value

question 121

Multiple Choice

A depreciable asset currently has a $40,100 book value.The company owning the asset uses straight-line depreciation.They paid $70,000 for this asset and consider it to have a $1,000 salvage value with a twelve year useful life.How long has the company owned this asset?

• A)5.2 years
• B)7 years
• C)10.2 years
• D)12 years
• E)Cannot be determined from the given information

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Definitions:

Industry

The sector of an economy that is concerned with production and manufacturing of goods, or provision of services.

Entry Barriers

Obstacles that prevent new competitors from easily entering an industry or area of business.

Competitors

Other businesses or individuals that offer similar products or services within the same market, competing for the same set of customers.

Market

An area or arena in which commercial dealings are conducted.