A Firm Is Considering Purchasing Two Assets

question 72

Multiple Choice

A firm is considering purchasing two assets.Asset A will have a useful life of 12 years and cost $4 million;it will have installation costs of $300,000 and a salvage or residual value of $400,000.Asset B will have a useful life of 8 years and cost $3.5 million;it will have installation costs of $200,000 and a salvage or residual value of $800,000.Which asset will have a greater annual straight-line depreciation?

• A)Asset A has $30,000 more in depreciation per year.
• B)Asset A has $37,500 more in depreciation per year.
• C)Asset B has $30,000 more in depreciation per year.
• D)Asset B has $37,500 more in depreciation per year.

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Definitions:

Fetal Stage

The stage of development inside the womb from the end of the embryonic stage, typically the ninth week after conception, until birth.

Caesarean Section

A surgical procedure used to deliver a baby through incisions in the mother's abdomen and uterus.

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The pressure of circulating blood on the walls of blood vessels, often measured as an indicator of cardiovascular health.

Survival

The act of remaining alive or in existence, especially after facing life-threatening conditions or situations.