First Third Company Depreciates an Asset with a Cost of $55,000

question 27

Multiple Choice

First Third Company depreciates an asset with a cost of $55,000 over 10 years using the straight-line method of depreciation and the yearly depreciation expense is $4,000, what is the estimated salvage value of the asset?

• A)$5,000
• B)$10,000
• C)$15,000
• D)$20,000
• E)$20,375

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Definitions:

Original Maturity

The initial term agreed upon at the issuance of a loan or bond, prior to any refinancing or alteration.

Annual Coupon Rate

The annual interest rate paid by a bond issuer to its holder, expressed as a percentage of the bond's face value.

Market Price

The immediate cost at which one can buy or sell a service or asset in the marketplace.

Semiannually

Occurring twice a year, commonly used in the context of interest payment schedules or bond coupon payments.