A Machine Cost $15,000 to Install,and Has a Resale Value

question 35

Multiple Choice

A machine cost $15,000 to install,and has a resale value one year later of $12,000.If the real interest rate is 10%,then the user cost of capital is ________.

• A)$4,500
• B)$1,500
• C)$3,000
• D)$1,200

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Definitions:

Dividends Declared

The announcement by a company’s board of directors of the payment of a specified amount per share to its shareholders, to be paid on a certain date.

Accounting Record

Documentation that contains the financial history and transactions of a company.

Shareholders' Equity

The amount of a company's total assets minus its total liabilities, representing the owners' share of the company.

Normal Balance

The side (debit or credit) on which increases to an account are recorded, based on the type of account.