Suppose Billy owns a hair salon in Dallas.He has one large hair dryer for which he paid $1,000.If he can sell the dryer one year later for $800,his total economic depreciation equals

Question

Quizplus · Accepted Answer

Economic depreciation is the reduction in the value of an asset due to wear and tear, obsolescence or any other reason. Here, Billy paid $1,000 for the hair dryer, and if he can sell it one year later for $800, the economic depreciation would be the difference between the purchase price and the resale price, which is $200. Therefore, the correct answer is B) $200.

Suppose Billy Owns a Hair Salon in Dallas