Zinc Corp Purchases a Truck at the Beginning of Year 1

question 18

Multiple Choice

Zinc Corp. purchases a truck at the beginning of Year 1 at a cost of $16,500. The truck is estimated to have a useful life of 6 years and a trade-in value of $1,500. Assuming that Zinc Corp. uses the straight-line method of depreciation, the book value of the truck at the end of Year 1 is:

• A) $13,580.
• B) $14,000.
• C) $12,000.
• D) $11,670.

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Definitions:

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors, using the same amount of resources.

Resource Endowments

These are the natural, human, and technological resources available to a country or region, crucial for economic development.

Comparative Advantage

A concept in economics that refers to a country's ability to produce goods and services at a lower opportunity cost than that of trade partners.

Domestic Opportunity Cost

The opportunity cost of producing goods domestically rather than importing them, measured by what is given up in the domestic production of other goods.