Question

If a company spends $20 million to install new footwear-making equipment with capacity to produce 1 million pairs of athletic footwear at its North American production facility, then its annual depreciation costs at that facility will rise by:a. 10% or $2,000,000. b. 15% or $3,000,000. c. 0 8% or $1,600,000. d. 5% or $1,000,000. e. 0 4% or $800,000.

Answer 1

Answer:A. 10% or $2,000,000

Explanation: Depreciation is a term used to describe how much of the value of an asset has been used of,it involves allocating a certain amount of cost of o the usage of an asset or an equipment through out the useful life of the asset or the equipment.

Assuming the depreciation cost of the facility will rise by 10%

=(10÷100)*$20,00000

The annual depreciation rate will be $2000000.