Using the Sum-Of-The Years'-Digits Method, Depreciation for 2014 and Book

question 121

Multiple Choice

Using the sum-of-the years'-digits method, depreciation for 2014 and book value at December 31, 2014, would be

• A)$13,500 and $13,500.
• B)$13,500 and $8,500.
• C)$12,000 and $17,000.
• D)$12,000 and $12,000.

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Definitions:

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets, assessing efficiency in asset use.

Debt/Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

ROE

The percentage of return on investments that shareholders directly benefit from, calculated by dividing net income by shareholder equity.

Compound Leverage Factor

A measurement used to describe the magnification of risk and return caused by using borrowed money or financial derivatives within an investment.