On January 2,2012,Lynch Company Acquired Machinery at a Cost of $800,000.This

question 36

Multiple Choice

On January 2,2012,Lynch Company acquired machinery at a cost of $800,000.This machinery was being depreciated by the double-declining-balance method over an estimated useful life of eight years,with no residual value.At the beginning of 2014,Lynch decided to change to the straight-line method of depreciation.Ignoring income tax considerations,the cumulative effect of this accounting change is

• A) $0.
• B) $100,000.
• C) $155,556
• D) $177,778

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Definitions:

Expected Rate

The return that an investor anticipates or forecasts receiving on an investment over a set period.

Correlation Coefficient

A statistical measure ranging from -1 to 1 that indicates the strength and direction of a linear relationship between two variables.

Covariance

A measure that demonstrates how two random variables move together, indicating the direction of their linear relationship.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, commonly used to quantify the risk associated with a security or investment portfolio.