The Average Carrying Value (Or Average Investment)of an Asset with No

question 78

Multiple Choice

The average carrying value (or average investment) of an asset with no salvage value is equal to:

• A)The original cost of the asset divided by its estimated useful life.
• B)The original cost of the asset divided by two.
• C)The average annual net cash flow of the asset multiplied by the asset's estimated useful life.
• D)The average annual net income of the asset multiplied by the asset's estimated useful life.

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Definitions:

Certified Check

A check verified by a bank, guaranteeing that the writer of the check has enough funds available for the transaction.

Drawee

The party in a financial transaction who is directed to pay a certain amount of money as outlined in a draft or check.

Draft

A preliminary version of a document or plan that is subject to revision.

Accept

To agree to receive or undertake something offered.