I don't even understand this question...can someone please point me in the right direction:
Use the following information to answer the question:
Cost of car: $26,000
Residual value: $6,000
Life: 5 years
I don't see a question.
That is the question I don't understand it...
Use the following information to answer the question:
Cost of car: $26,000
Residual value: $6,000
Life: 5 years
Oh maybe this is the first question then this question follows...
Federal Express bought material handling equipment for its hub operations that cost $180,000. Using the MACRS, what is the depreciation expense in year 3 (using a five-year class)?
To answer the question, we need to understand what is being asked. The information provided consists of the cost of the car, its residual value, and its expected life span. Based on this information, the question could be related to any of the following:
1. Depreciation: You may be asked to calculate the annual depreciation of the car. This can be done by subtracting the residual value from the cost of the car and then dividing that difference by the number of years of the car's life.
2. Annual Depreciation Rate: You may be asked to calculate the annual depreciation rate of the car, expressed as a percentage. This can be found by taking the annual depreciation amount and dividing it by the cost of the car, then multiplying by 100.
3. Salvage Value: You may be asked to determine the salvage value of the car. Salvage value refers to the estimated worth of the car after its useful life ends. In this case, it is given as $6,000.
4. Remaining Book Value: You may be asked to find the remaining book value of the car at a specific point in time. The book value is the original cost of the car minus the accumulated depreciation.
5. Residual Value Ratio: You may be asked to calculate the residual value ratio. This ratio is found by dividing the residual value by the cost of the car and can give an indication of how much of the car's original value remains at the end of its life.
Without further details, it is difficult to determine which specific question is being asked. However, you can now use this information to guide you in understanding and answering the question.