Orange Corp

question 30

Multiple Choice

Orange Corp.constructed a machine at a total cost of $70 million.Construction was completed at the end of 2012 and the machine was placed in service at the beginning of 2013.The machine was being depreciated over a 10-year life using the sum-of-the-years'-digits method.The residual value is expected to be $4 million.At the beginning of 2016,Orange decided to change to the straight-line method.Ignoring income taxes,what will be Orange's depreciation expense for 2016?

• A)$4.8 million.
• B)$5.4 million.
• C)$6.6 million.
• D)$9.4 million.

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Definitions:

Accident

The fallacy of applying a generalization to a special case in disregard of qualities or circumstances that make it an exception to the generalization.

General

Relating to or involving all or most people, things, or places, especially without specifying details.

Opposite

Pertaining to something that is diametrically different in position, direction, or character from something else.

Division

The fallacy of inferring that a part has a property merely because the whole has that property.