A Printing Machine That Has an Estimated Useful Life of 5

question 144

Essay

A printing machine that has an estimated useful life of 5 years and an initial value of $130,000 (with no salvage value) had to be depreciated. At the end of the first year, using the straight-line method of depreciation, the amount of depreciation allowed was $26,000, and when the sum-of-the-years'-digits method was used the depreciation was $43,333. Determine the amount of depreciation that would be allowed for the first year if the printing machine were depreciated by the double declining-balance method.
$__________
Which of these three methods would result in the largest depreciation of the printing machine at the end of its first year of use?
__________ method

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Definitions:

Price Inelastic

This refers to a situation where the quantity demanded or supplied of a good or service changes minimally in response to changes in its price.

Farm Products

Goods that are the result of agricultural activities, including crops, livestock, and the products derived from them.

Total Revenue Test

A method used to assess the impact of price changes on total revenue, analyzing if a product is elastic or inelastic in demand.

Elasticity

A measure of how much the demand or supply of a product changes in response to a change in price.