Use the information below to answer the following question(s).The following data are available for a foundry operation started as a new company four years ago when the construction cost index was 125:
* = "of long-term assets at historical cost"
-What is the current cost annual depreciation in year 4 dollars?
A)$165,000
B)$200,000
C)$240,000
D)$295,000
E)$440,000

Question

Use the information below to answer the following question(s).The following data are available for a foundry operation started as a new company four years ago when the construction cost index was 125:
  * = "of long-term assets at historical cost"
-What is the current cost annual depreciation in year 4 dollars?
A)$165,000 
B)$200,000 
C)$240,000 
D)$295,000 
E)$440,000

Quizplus · Accepted Answer

The annual depreciation in year 4 is $40,000. The current cost is $440,000. So the current cost annual depreciation in year 4 dollars is $440,000 * $40,000 / $200,000 = $165,000.

Use the Information Below to Answer the Following Question(s)