Orange Corp

question 58

Multiple Choice

Orange Corp. constructed a machine at a total cost of $70 million. Construction was completed at the end of 2005 and the machine was placed in service at the beginning of 2006. 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 2009, Orange decided to change to the straight-line method. Ignoring income taxes, what will be Orange's depreciation expense for 2009?

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

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Definitions:

Just Reason Doctrine

A legal principle that requires an employer to provide a fair and genuine reason for disciplining, dismissing, or making significant changes to an employee's contract.

Flexible Benefits

A type of employee benefits plan that allows workers to choose from a variety of pre-tax benefit options based on their personal needs.

Benefit Packages

A collection of non-wage compensations provided to employees in addition to their normal wages or salaries.

Compensation Time Benefits

are benefits allowing employees to take time off instead of receiving overtime pay for extra hours worked.