If the Original Expected Life Remained the Same (I

question 130

Multiple Choice

If the original expected life remained the same (i.e., 5-years) , but at the beginning of 2016, the salvage value was revised to $4,000, the annual depreciation expense for each of the remaining years would be:

• A)$2,720.
• B)$13,600.
• C)$7,400.
• D)$6,800.

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Definitions:

Total Assets

The sum of all current and non-current assets owned by an entity, reflecting its overall value and financial strength.

Net Profit/Pretax Profit

The income a company has left after paying all expenses but before taxes; an indicator of overall profitability.

Leverage Ratio

A financial ratio indicating the level of debt used by a business to finance its assets, often used to assess financial risk.

Asset Turnover

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