An Asset Was Purchased for $100,000

question 12

Multiple Choice

An asset was purchased for $100,000.It had an estimated residual value of $20,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $14,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

• A)$7,667.
• B)$8,572.
• C)$9,000.
• D)$14,334.

---

Definitions:

Factor's Price

The cost of utilizing factors of production like labor, land, and capital in the process of manufacturing.

Factor's Marginal Product

The additional output that results from the use of one more unit of a production factor, holding other factors constant.

Factor Of Production

An input used in the production of goods or services, including labor, capital, land, and entrepreneurship.

Complements

Goods or services that are used together such that an increase in the price of one causes a decrease in the demand for the other, like coffee and sugar.