Red Corp Constructed a Machine at a Total Cost of $70

question 112

Multiple Choice

Red Corp. constructed a machine at a total cost of $70 million. Construction was completed at the end of 2009 and the machine was placed in service at the beginning of 2010. The machine was being depreciated over a 10-year life using the straight-line method. The residual value is expected to be $4 million. At the beginning of 2013, Red decided to change to the sum-of-the-years'-digits method. Ignoring income taxes, what will be Red's depreciation expense for 2013?

• A)$4.8 million.
• B)$5.4 million.
• C)$6.6 million.
• D)$11.55 million.

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Definitions:

Cornea

The clear, outer layer at the front of the eye that helps focus incoming light onto the retina.

Golgi Tendon Organs

Sensory receptors located at the junction of muscles and tendons that monitor tension developed in muscles.

Proprioceptors

Proprioceptors are sensory receptors located in muscles, tendons, and joints that help to convey information about body position and movement.

Dermis

The dermis is the thick layer of living tissue below the epidermis that forms the true skin, containing sweat glands, hair follicles, and blood vessels.