McCabe Institute Leased a New Machine Having an Expected Useful

question 48

Multiple Choice

McCabe Institute leased a new machine having an expected useful life of 12 years.The noncancelable lease term is 10 years,and McCabe may exercise a purchase option at the end of the noncancelable term.The machine should be capitalized by McCabe and depreciated over

• A) 10 or 12 years at McCabe's option.
• B) 12 years.
• C) 10 years.
• D) 9 years.

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Definitions:

Synthesize Bile

The process of producing bile, a digestive fluid created by the liver, critical for the digestion and absorption of fats in the small intestine.

Gastrin

A hormone produced by the stomach that stimulates the secretion of gastric acid, aiding in digestion.

Endocrine Cells

Cells that release hormones directly into the bloodstream, found within endocrine glands like the thyroid or pancreas.

Hydrochloric Acid

A strong acid secreted by the stomach lining that helps in digestion and acts as a barrier to pathogens.