Assume That a Machine with a Cost of $90 000

question 1

Multiple Choice

Assume that a machine with a cost of $90 000 has accumulated depreciation of $48 000 on the date of its disposal. What is the profit or loss on disposal of the old machine if it was traded-in for $40 000 on a new machine? (Ignore GST.)

• A) $40 000 loss
• B) $2 000 loss
• C) $8 000 gain
• D) $42 000 loss

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Definitions:

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.

Dividends Paid

The total amount of dividend payments made by a corporation to its shareholders over a specified period, usually quarterly or annually.

Growth Rate

The rate at which a company's earnings or capital is expected to grow, usually annually, influencing investment decisions.

Dividends

Monies disbursed by a business to its owners, often coming from the profit the company makes.