A Truck That Cost $12,000 Was Originally Being Depreciated Over

question 76

Multiple Choice

A truck that cost $12,000 was originally being depreciated over four years using the straight-line method with no salvage value.If after one year,it was decided that the truck would last an additional four years (or a total of five years) ,the second year's depreciation would be

• A) $1,500
• B) $2,250
• C) $2,400
• D) $3,000

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a predetermined price within a specific time frame.

Exercise Price

The rate at which a call option allows buying or a put option allows selling of the underlying financial instrument or commodity.

Put Option

A contractual agreement allowing the possessor the choice, not the duty, to dispose of a particular volume of an underlying asset at an agreed-upon rate before a certain deadline.