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Company a Has Equipment That Cost $5,250,000 and That Has

Question 158

Multiple Choice

Company A has equipment that cost $5,250,000 and that has accumulated depreciation of $500,000; Company B has equipment that cost $4,600,000 and that has accumulated depreciation of $4,400,000.Both companies use straight-line depreciation.For both companies,the equipment has an estimated useful life of 40 years with a $100,000 residual value.What can be inferred from the information?


A) Both companies have relatively old equipment.
B) Company A's equipment is older than Company B's.
C) Company A's equipment is newer than Company B's.
D) Company B's equipment has a higher book value than Company A's.

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