This is a standard deviation contest. Which of the following sets of four numbers has the smallest possible standard deviation?
1 answer:
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Answer:
option (a) $6,240
Step-by-step explanation:
Given:
Purchasing cost of the equipment = $82,000
Estimated life = 5 years
Salvage value = $4,000
Revised expected life = 8 years
Now,
Depreciation per year =
therefore,
The accumulated Depreciation at the beginning of year 4
= Annual depreciation × years passed
= 15,600 × 3
= $46,800
Thus,
The book value at the beginning of year 4
= Purchasing cost - Depreciation
= $82,000 - $46,800
= $35,200
Now,
The remaining life = Revised estimated life - Years passed
= 8 - 3
= 5 years
therefore,
Depreciation expense =
=
= $6,240
Hence,
The correct answer is option (a) $6,240