Answer: Sunk Cost
Explanation:
A sunk cost is an expense which a company or entity has already incurred and which cannot be recovered and so should not be considered when making decisions regarding incremental benefits or costs to an investment.
The $48 had already been incurred to produce the defective units and cannot be recovered so it is a sunk cost that should not be considered moving forward.
The processes individuals use when making a purchase decision are called _____. This is also the reason individuals recognize and respond to the distinctive lettering used on Coca-Cola cans, the shape of the Nike swoosh, and the color of a can of Campbell soup. Group of answer choices consumer behavior
Answer:
Consumer behavior
Explanation:
Consumer behavior is the study related to the individuals and the organization with respect to the choosing, and using of products and services. It mainly deals in the motivation, behavior, and the psychology. The consumer behavior should be known at the time of shopping
So the process that use by the individuals at the time of making a purchase decision is known as the consumer behavior
Hence, the same is to be conisdered
Your company purchases new equipment for $80,000 and depreciates it on a straight line basis over a 5 year period resulting in annual depreciation expense of $16,000. At the end of the 4th year, a buyer purchases it from your company for $30,000. If your company's marginal tax rate is 40%, what is the after tax cash flow or after tax salvage value at the end of year 4
Answer:
$24,400
Explanation:
The computation of the after tax salvage value at the end of year 4 is shown below:
Before that following calculation need to be determined
Book value = Cost - Accumulated depreciation
= $80,000 - ($16000 × 4 years)
= $16,000
Now gain on sale is
= $30,000 - $16,000
= $14,000
Now
After-tax cash flow is
= Sale proceeds - (Tax rate × Gain on sale)
= $30,000 - ($14000 × 40%)
= $24,400
Wilco LLC uses the weighted average method to determine equivalent units of production. Wilco LLC reported that in last quarter that 10,000 units were completed and moved to finish goods inventory. Wilco also determines that 7,000 units were in ending Goods in Process inventory. The units in ending Goods in Process inventory were 50% finished in regards to all costs. Determine Wilco's equivalent units of production for the quarter.
Answer:
the number of equivalent units for the production is 13,500 units
Explanation:
The computation of the number of equivalent units for the production is shown below:
Units completed and transferred is 10,000 units
Add Ending work in the process [7,000 × 0.50] 3,500 units
Total equivalent units 13,500 units
Hence, the number of equivalent units for the production is 13,500 units
The same is relevant
Some customer support call center let incoming callers know how long they would be on hold before talking to a service agent. This improves customer experience because: Group of answer choices it lessens the perception of unfairness in waiting in-process waits seem shorter than pre-process waits uncertain waits seem longer than certain waits unoccupied time seems longer than occupied
Incoming callers' perceptions of unfairness are diminished and a clear expectation is set by communicating the length of their wait time in advance. This enhances the overall customer experience.
What are the abilities in customer service?Client retention and acquisition are highly dependent on customer service. Companies can increase sales by utilising good customer service. Being empathetic, communicating effectively, and addressing problems are essential components of providing exceptional customer service.
A call centre interview is what?For businesses, call centres serve clients who have queries, grievances, or suggestions on goods or services. A call centre interview is a chance for you to highlight your problem-solving abilities and show off your capacity to win over clients' trust.
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Cold, Inc., reported a $100,000 total tax expense for financial statement purposes in year 1. This total expense consisted of $150,000 in current tax expense and a deferred tax benefit of $50,000. The deferred tax benefit consisted of $90,000 in deferred tax assets reduced by a valuation allowance of $40,000. In year 2, Cold reports $600,000 in book net income before tax. Cold records no other permanent or temporary book-tax differences. At the end of year 2, Cold's management determines that the existing valuation allowance of $40,000 should be reduced to zero. What is Cold's total tax expense for year 2
Answer:
170,000
Explanation:
With $600,000 of book income, the potential total book tax expense is $210,000 ($600,000 × 35%). However, the release of the $40,000 valuation allowance in the current year allows an additional $40,000 of future tax benefits (savings) to be considered in the current year. Accordingly, the total tax expense is $170,000 ($210,000 – $40,000).
Cold's management determines that the existing valuation allowance of $40,000 should be reduced to zero. The Cold's total tax expense for year 2 is 170,000.
What is valuation allowance?The amount of a deferred tax asset is offset by a reserve called a valuation allowance. Based on that element of the tax asset for which it is more probable than not that a tax advantage won't be realized by the reporting business, the allowance's size is determined.
The potential total book tax expense with $600,000 in book income is $210,000 ($600,000 x 35%).
However, an additional $40,000 in future tax benefits (savings) can be taken into account in the current year due to the release of the valuation allowance in the current year.
The total tax expense is therefore $170,000 ($210,000 - $40,000).
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Tamarisk, Inc. employs a 5-day workweek and a September 30 year-end. Normal weekly wages amount to $33840. If September 30 ends on a Wednesday, what is the appropriate journal entry at fiscal year-end?
Answer:
Daily wages would therefore be;
= 33,840/5
= $6,768 per day
Week ends on wednesday which is 3 days into the week.
= 6,768 * 3
= $20,304
Journal Entry
Date Details Debit Credit
September 30 Salaries and Wages Expense $20,304
Salaries and Wages Payable $20,304
Bothell Construction, LLC, Ballard Remodel, Inc., and Tim's House Painting Company agreed that on three upcoming projects, Ballard Remodel would bid lowest on one, Bothell Construction would submit the lowest bid on the second project, and Tim's House Painting would submit the lowest bid on the third project. All three discussed this and agreed that this would be the best way that each would be assured of work for the upcoming season. This behavior:
Answer:
violates ethical, but not legal, standards.
Explanation:
Sherman act was created to prohibit restrains on trade of any collusion by different parties to form a monopoly or control price.
The act does not however prohibit all restraints of trade, bit rather those that are very unreasonable and harmful to competition.
In the given scenario the three companies only agreed to bid lowest for the 3 project under consideration.
Their action does not give them unfair advantage over other firms and may even lead to a loss on their part.
They do not have a strategy that will guarantee an edge over other firms.
So this is an ethical violation but not a legal one.
preparing a budget is an example of which of the following types of managment skills?.
A. advertising skills
B. human resource skills
C. technical skills
D. conceptual skills.
the correct answer is c. technical skills
Preparing a budget is an example of technical skills under several management skills.
What is budget?A budget is a financial plan that projects future earnings and costs. A budget, put simply, forecasts future spending and saving in addition to anticipated income and expenses.
However Budgeting is the act of estimating a company's income and expenses for a given time period. Examples include the sales budget created to project the company's sales and the production budget created to predict the company's output, among others.
There are four sorts of budgets that businesses typically employ: incremental, activity-based, value-based, and zero-based are the first four.
Therefore, One of the most crucial competencies for someone working in business management is budgeting. The fundamentals of budgeting involve setting goals and making choices on particular spending patterns. Understanding the fundamentals of business is the most crucial component of finance.
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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with equal probabilities of 0.5. The alternative riskless investment in T-bills pays 5%. a. If you require a risk premium of 10%, how much will you be willing to pay for the portfolio
Answer:
A. $86,956.52
B. 15%
C.$83,333.33
Explanation:
a) Calculation for how much will you be willing to pay for the portfolio
First step is to calculate the required rate of return on the portfolio using this formula
The required rate of return on the portfolio= Risk Free Return+Risk Premium
Let plug in the formula
The required rate of return on the portfolio=5%+10%
The required rate of return on the portfolio=15%
Second step is to calculate the Expected value of the portfolio
Expected value of the portfolio= 0.5*50,000+0.5*150,000
Expected value of the portfolio =$100,000
Assuming x is the amount you will be willing to pay for the portfolio which means that:
x*(1+15%)=100,000 OR x= $86,956.52
Therefore You would be willing to pay $86,956.52 for the portfolio.
b) Calculation for What will the expected rate of return on the portfolio be
Expected return on the portfolio= (100,000-86,956.52)/86,956.52
Expected return on the portfolio=15%
Therefore the Expected return on the portfolio will be 15%
c) Calculation for What is the price you will be willing to pay now
In a situation where the risk premium is 15%, which means that the required rate of return will be
Required rate of return=5%+15%
Required rate of return=20%
Therefore the price you will be willing to pay= 100,000/(1+20%)
Price=$83,333.33
what is double book keeping entry in accounting?
Answer:
Explanation:
Double-entry bookkeeping is an accounting system where every transaction is recorded in two accounts: a debit to one account and a credit to another.
Kaelyn's mother, Judy, looks after Kaelyn's four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy's home every day). Since Judy is a relative, Kaelyn made sure, for tax purposes, to pay her mother the going rate for child care ($6,460 for the year). What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $37,600
Answer:
Kaelyn's child and dependent care credit is:
$2,100.
Explanation:
a) Data and Calculations:
Going rate for child care for twins = $6,460
Maximum allowed = $6,000
Kaelyn's AGI for the year = $37,600
Percentage of child and dependent care credit = 35% of the allowed maximum for two children
b) The maximum qualified child and dependent care expense is $6,000 ($3,000 each) that Kaelyn can claim for the twins. Therefore, her child and dependent care credit is 35% of $6,000, which equals $2,100.
According to arnold and bustos, which two sectors of the US economy are the mot carbon-intensive?
Answer: Transportation and electricity generation
Explanation:
According to Arnold and Bustos, the two sectors of the United States economy that are the most carbon-intensive are the transportation sector and the electricity generation sector.
The transportation sector contributes a lot to the emissions of greenhouse gas emissions as they typically come when fossil fuel for ships, vans, planes, motorcycles, cars etc are burned. Also, the generation of electricity is also carbon intensive as carbon is being powered in order to generate electricity.
Worker organizations can affect wages by:
A. advocating for higher pay for workers.
B. making workers more productive over time.
C. lowering the market value of each worker.
D. ensuring that all workers receive an education.
Worker organizations can affect wages by advocating for higher pay for workers, as the worker starts demanding for the higher wages.
What is Worker organization?Worker organizations are the established organization that shows the interest and opinion of the workers. Mainly this is for the welfare of the workers, to represent their interest about the wages and working condition in the organization.
Thus, option A is correct.
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A company's January 1, 2019 balance sheet reported total assets of $153,000 and total liabilities of $61,500. During January 2019, the company completed the following transactions:______. (A) paid a note payable using $11,500 cash (no interest was paid); (B) collected a $10,500 accounts receivable; (C) paid a $5,300 accounts payable; and (D) purchased a truck for $5,300 cash and by signing a $21,500 note payable from a bank. The company's January 31, 2019 balance sheet would report which of the following?Assets Liabilities Stockholders's Equity$163,000 $77,700 $85,300Assets Liabilities Stockholders's Equity$153,000 $61,500 $91,500Assets Liabilities Stockholders's Equity$174,500 $105,100 $69,400Assets Liabilities Stockholders's Equity$157,700 $66,200 $91,500
Answer:
d. Assets, Liabilities, Stockholders's Equity [$157,700, $66,200, $91,500]
Explanation:
Accounting equation
Assets = Liabilities + Equity
Beginning Balance $153,000 $61,500 $91,500
1. -$11,500 -$11,500
2. $10,500
-$10,500
3. -$5,300 -$5,300
4. $26,800 $21,500
-$5,300
Total $157,700 $66,200 $91,500
D- Company's standings as on 31st January 2019 will be assets amounting to $157700, the liabilities will amount to $66200 and stockholder's equity in the company stands at $91500.
It is to be noted that the assets of the firm are always equal to the summation of total liabilities of the firm along with stockholder's equity being held in the company for such period.
We know the formula that Liabilities of a firm are calculated by the way of subtracting the stockholder's equity of the company from the total assets being held by the company.Various adjustments occurred during the period of making such accounting entries and hence this resulted in obtaining the true and fair values of positioning of the company.After due adjustments the values are calculated as shown given in the image below.Hence, the assets are calculated as $157700, the liabilities of the company stand at $66200 and the stockholder's equities stand at $91500.
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Minion, Inc., has no debt outstanding and a total market value of $344,400. Earnings before interest and taxes, EBIT, are projected to be $49,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 17 percent higher. If there is a recession, then EBIT will be 26 percent lower. The company is considering a $175,000 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of stock. There are currently 8,200 shares outstanding. Assume the company has a market-to-book ratio of 1.0 and the stock price remains constant.a. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
A. $5.97
$6.99
$4.42
B. 17%
26%
Explanation:
A. If Economy conditions are normal
$49,000 / 8,200 shares = $5.97 each
If Economy expands
$49,000 * 117 / 100 = $57,330
$57,330 / 8,200 shares = $6.99 each
If Economy is in recession
$49,000 * 74 / 100 = $36,260
$36,260 / 8,200 = $4.42 each
B.
If Economy expands
$6.99 - $5.97 = $1.02
$1.02 / $5.97 * 100 = 17%
If Economy is in recession
$4.42 - $5.97 = -$1.55
-$1.55 / $5.97 = -26%
Hepburn Company transferred $58,000 of accounts receivable to a local bank. The transfer was made without recourse. The local bank remits 60% of the factored amount to Hepburn and retains the remaining 40%. When the bank collects the receivables, it will remit to Hepburn the retained amount less a fee equal to 1% of the total amount factored. Hepburn estimates a fair value of its 15% interest in the receivables of $12,000 (not including the 1% fee). Hepburn will show an amount receivable from factor of: Multiple Choice $23,200. $12,000. $11,420. $22,620.
Answer: $11420
Explanation:
The amount that Hepburn will show as an amount receivable from factor will be the estimated fair value of the interest in receivables minus the factoring fee given in the question. This will be:
= $12,000 - ($58,000 × 1%)
= $12,000 - ($58,000 × 0.01)
= $12,000 - $580
= $11,420
A firm conducted a market analysis and determined that a new wo
will remain the same, what change should occur initially to maxim
A)
The firm should increase output.
B)
The firm should decrease output.
O
The firm should keep productivity the same.
D)
The firm should raise costs other than labor.
23) The creation of a successful new product depends on a company's understanding of its ________ and its ability to deliver ________ to customers. A) customers, competitors, and markets; superior value B) product, marketing mix, and marketing strategy; functional features C) product life cycle, legal responsibilities, and social responsibilities; innovations D) customers, brands, products; product images E) competitors, distributors, and employees; new styles
Answer:
A) A) customers, competitors, and markets; superior value
Explanation:
For a company to create a successful product, First, this company must create a great product that has a clear, well defined also large consumer market where the product that is being created offers a solution to existing consumer issues as well as having the ability to outperform it's competitors. This can be achievable through offering a product that has superior value.
Secondly, this new product has to be properly defined across the final consumer, technology and business before the company starts execution.
(a) Based on the information provided, describe the ways in which Volkswagen did not fulfill the requirements of effective corporate governance.
(b) In what ways did the Board of Directors sidestep its obligations to protect shareholder interests?
(c) How could Volkswagen better select its Board of Directors to avoid mistakes such as the emissions
scandal in 2015?
Answer:
I believe Volkswagen did not fulfill the requirements of effective corporate governance mainly because the board didn’t have enough independent directors present.
The essential driver is the nonappearance of a solid gathering of independent directors. In view of German Corporate law, administration is given by a Management Board and a Supervisory Board, with representatives making up half of the Supervisory Board. This ought to have took into consideration in any event half of the Supervisory Board to be completely independent. While remaining inside the 'letter of the law,' they evaded the 'spirit of the law' by cycling recent former senior executives through the Supervisory Board Chairmanship position and other board positions. This had the impact of expelling genuinely independent oversight.
To select the next board members and avoid any future issues Volkswagen can keep in mind the following things about the board that it is :
Is well informed about the company’s performance.
Guides and judges the CEO and other top executives.
Has the courage to curb management actions the board believes are inappropriate or unduly risky.
Certifies to shareholders that the CEO is doing what the board expects.
Provides insight and advice to management.
Is intensely involved in debating the pros and cons of key decisions and actions
Explanation:
According to our Chapter 8 reading, the first step in time management should be
If the minimum attractive rate of return is 7%, which alternative should be chosen assuming identical replacement (like kind exchange)
A B
First Cost $5000 $9200
Uniform Annual Benefit $1750 $1850
Useful life ,in years 4 8
Answer:
The alternative that should be chosen assuming identical replacement is:
Alternative B.
Explanation:
a) Data and Calculations:
Alternatives:
A B
First Cost $5,000 $9,200
Uniform Annual Benefit $1,750 $1,850
Useful life, in years 4 8
Rate of return 7% 7%
Annuity factor 3.387 5.971
Present value of annuity $5,927.25 $11,046.35
Net cash flow $927.25 $1,846.35
b) Alternative B yields a higher return than Alternative A. Since the two alternatives are based on the same rate of return, Alternative B will bring in a higher annual benefit, even when discounted to the present value.
You are buying some television time and the station tells you they reach 87,000 people. They quote you $3 CPM (cost per thousand reached). How much will you have to pay for the time?
A) $261
B) $1,000
C) $3,000
D) $87
Answer:
A) $261
Explanation:
Costs per thousand, as the name suggests, is the cost for every 1000 viewers.
The determine the actual cost; the first step is to divide the total audience by 1000
=87,000/1000
=87
There are 87 sets of 1000 viewers. Each set is charged as $3. The total costs will be
=87 x $3
=$261
Ridiculousness, Inc., has sales of $48,000, costs of $21,200, depreciation expense of $1,900, and interest expense of $1,200. If the tax rate is 35 percent, what is the operating cash flow, or OCF
Answer:
OCF = $18,505
Explanation:
To calculate OCF, we first need the income statement:
Income Statement
Sales $ 48,000
Costs 21,200
Depreciation 1,900
EBIT $ 24,900
Interest 1,200
Taxable income $ 23,700
Taxes (35%) 8295
Net income $ 15,405
OCF = EBIT + Depreciation - Taxes
OCF = $24,900 + 1,900 - 8,295
OCF = $18,505
Jenin recently purchased 100 shares of Tarifi's Optical common stock for $6,000. The stock is expected to provide an annual cash flow of dividends of $400 indefinitely. Assuming a discount rate of 8 percent, how does the price Jenin paid compare to the value of the stock?
Answer:
Since the present value of the perpetuity ($5,000) is less than the price that Jenin paid for the stocks ($6,000), we can conclude that she paid an excessively high price for them.
Explanation:
Jenin invested $6,000 in stocks that yield a perpetual dividend. In order to compare if Jenin made a good deal we must find the present value of the perpetuity:
present value = annual cash flow / discount rate = $400 / 8% = $5,000
Since the present value of the perpetuity is less than the price that Jenin paid for the stocks, we can conclude that she paid an excessively high price for them.
We conclude that this stock is overpriced and it was purchased at a premium.
Total number of shares Bought = 100 shares
100 shares were purchased at the rate of $6000
The rate of discount is = 8 percent = 0.08
Cash flow = 400 dollars
To get the theoretical value of these 100 shares
Value = cash flow ÷ discount
= 400 ÷ 0.08
= $5000
Therefore the 6000 dollars that was paid to get the 100 shares is more than the calculated theoretical value of 5000.. We conclude that this stock is overpriced and it was purchased at a premium.
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On January 1, 2021, Legion Company sold $290,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $217,719, priced to yield 10%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.) Multiple Choice $8,700. $10,886.
Answer:
the bond interest expense for the six months ended June 30, 2021, in the amount of $10,8864
Explanation:
The computation of the interest expense is shown below
= Carrying Value of Bond × Effective interest rate
= $217,719 × 10% yield interest × 6 months ÷ 12 months
= $10,886
Hence, the bond interest expense for the six months ended June 30, 2021, in the amount of $10,8864
Therefore the second option is correct
You want to construct a portfolio containing equal amounts of U.S. Treasury bills, stock A, and stock B. If the beta of the stock A is 1.46 and the beta of the portfolio is 0.93, what does the beta of stock B have to be
Answer:
beta of stock B = 1.33
Explanation:
the beta of treasury bills is 0
the beta of stock A = 1.46
the beta of stock B = ?
the portfolio contains equal amounts of each investment and its overall beta is 0.93
0.93 = (0 x 1/3) + (1.46 x 1/3) + (B x 1/3)
0.93 = 0 + 0.4867 + 0.333B
0.93 = 0.4867 + 0.333B
0.4433 = 0.333B
B = 0.4433 / 0.333 = 1.33
Condensed financial data of Windsor Company for 2017 and 2016 are presented below.WINDSOR COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2017 AND 2016 2017 2016Cash $1,770 $1,170Receivables 1,790 1,320Inventory 1,610 1,940Plant assets 1,910 1,680Accumulated depreciation (1,200) (1,190 )Long-term investments (held-to-maturity) 1,300 1,420 $7,180 $6,340Accounts payable $1,210 $910Accrued liabilities 200 240Bonds payable 1,370 1,560Common stock 1,880 1,740Retained earnings 2,520 1,890 $7,180 $6,340WINDSOR COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2017Sales revenue $7,010Cost of goods sold 4,730Gross margin 2,280Selling and administrative expenses 930Income from operations 1,350Other revenues and gains Gain on sale of investments 80Income before tax 1,430Income tax expense 540Net income 890Cash dividends 260Income retained in business $630Additional information:During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.Prepare a statement of cash flows using the indirect method.
Answer and Explanation:
The preparation of the cash flow statement is presented below
Windsor Company
Statement of cash flow
Cash flows from operating activities
Net Income $890
Adjustments made
Add: Depreciation expenses ($1,200 - $1,190) $10
Less: Gain on sale of investment -$80
Less: Increase in receivable -$470
Add: Decrease in Inventories $330
Add: Increase in Accounts Payable $300
Less: Decrease in Accrued Liabilities -$40
Net cash from operating activities $940
Cash flows from investing activities
Sale of long term investment (($1,420 - $1,300) + $80) $200
less: Purchase of Plant Assets ($1,910 - ($1,680 + $70)) -$160
Net cash used investing activities $40
Cash flows from financing activities
Repayment of Bonds Payable -$190
Add: Issue of Common stock ($1,880 - ($1,740 + $70)) 70
Less: Payment of Dividends -$260
Net cash from financing activities -$380.00
Net Increase in cash and cash equivalents $600
Add: Beginning cash balance $1,170.00
Ending Cash Balance $1,770
Non cash activities
Issue of common stock of $70 for acquisition of Plant
ABC manufacturing company produces a television table that sells for $10 per unit. It has variable costs of $5 per unit and incurs fixed costs of $20000 per period. Find break-even point in units.
Answer:
i think it's 4000 units
Suppose a firm in a competitive market earned $3,000 in total revenue and had a marginal revenue of $30 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold
Answer:
100 units were sold at $30 per unit
Explanation:
theoretically, in a perfect competition market, the price of a good = marginal revenue = marginal cost. Also, the market sets the price, not the individual firm.
If total revenue = $3,000 and marginal revenue per unit = $30, then we can assume that the sales price of each unit was $30, therefore, they sold $3,000 / $30 = 100 units.
The average revenue per unit, and how many units were sold is $30 and 100 units.
Based on the information given the average revenue per units is the marginal revenue of the amount of $30.
The number of units sold is calculated as:
Number of units sold= Total revenue/Marginal revenue
Number of units sold= 3000/30
Number of units sold= 100 units
Inconclusion the average revenue per unit, and how many units were sold is $30 and 100 units.
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A machine costing $91,800 was purchased May 1. The machine should be obsolete after three years and, therefore, no longer useful to the company. The estimated salvage value is $5,400. Calculate the depreciation expense for each year of its expected useful life using each of the following depreciation methods: (a) straight-line, (b) double-declining balance. For double-declining balance, do not round until your final answer. Round your final answers to the nearest dollar.
Answer:
(a) straight-line
deprecation expense per year = ($91,800 - $5,400) / 3 years = $86,400 / 3 years = $28,800 per year
(b) double-declining balance
depreciation expense year 1 = 2 x 1/3 x $91,800 = $61,200
depreciation expense year 2 = 2 x 1/3 x $30,600 = $20,400
depreciation expense year 3 = $20,400 - $5,400 = $15,000
