Jennings Advertising Inc

question 41

Multiple Choice

Jennings Advertising Inc. reported the following in its December 31, 2013, balance sheet: In a disclosure note, Jennings indicates that it uses straight-line depreciation over 10 years and estimates salvage value at 10% of cost. What is the average age of the equipment owned by Jennings?

• A)2.7 years.
• B)3 years.
• C)7 years.
• D)7.3 years.

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Definitions:

Equilibrium Price

The cost level at which the supply of products equals the demand for those products in the market.

Market Demand

The total amount of a product or service that all consumers in a market are willing and able to purchase at varying prices over a specified time period.

Market Supply

The total amount of a product or service that is available for purchase at any given price level in a market.

Equilibrium Price of X

The market price at which the quantity of a commodity demanded equals the quantity supplied, specifically for commodity X.