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netineya [11]
3 years ago
7

The following present value factors are provided for use in this problem.

Business
1 answer:
Sati [7]3 years ago
8 0

Answer:

$7,213.40

Explanation:

The computation of the net present value is shown below:

= Present value of all yearly cash inflows after applying discount factor - initial investment

where,  

Initial investment is $50,000

And, the present value till 3 year would be

= Annual cash flows × PVIFA factor for 3 years at 12%

= $18,000 × 2.4018

= $42,232.40

And, the present value for fourth year would be

= Annual cash flows × present value factor

= $22,000 × 0.6355

= $13,981

So, the total present value would be

= $43,232.40 + $13,981

= $57,213.40

Since the annual cash flows are same for the three years so we use the PVIFA table

Refer to the PVIFA table

Now put these values to the above formula

So, the value would be equal to

= $57,213.40 - $50,000

= $7,213.40

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The amount to be recorded as depreciation expense on December 31, 2021, is (B) $9,590.

<h3>What is depreciation expense?</h3>
  • Depreciation expense is the cost of a depreciated asset for a specific period, and it reveals how much of the asset's value was used up in that year.
  • Accumulated depreciation is the entire amount of depreciation expense given to an asset since it was placed in service.
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  • The corporation would most likely choose a straight-line depreciation technique, which would result in a $1,000 monthly depreciation expenditure ($84,000/84 months = $1,000 per month).

The straight-line technique of calculating depreciation expense is given below:

  • = (Original cost - salvage value) ÷ (useful life)
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Know more about depreciation expenses here:

brainly.com/question/25785586

#SPJ4

The correct question is given below:

A company purchased factory equipment on June 1, 2021, for $173000. It is estimated that the equipment will have a $8600 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2021, is ______.

(A) $16440.

(B)$9590.

(C)$8220.

(D)$6850.

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