A machine purchased for depreciates by of its value each year under the declining-balance method. What is its book value after one year?
Answer and explanation
Correct answer: A.
- Step 1: Compute the first-year depreciation: . Deduct from original cost: . **Answer: . Why not the others:** subtracts 2000, subtracts only 1500, and subtracts over 18 percent.
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