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You disagree with Ed "Shifty" Smith, a car salesperson, on the price of an open-end lease. He says the depreciation charge is only $6,000. What is the actual depreciation charge for a car now worth $23,000 that is expected to drop in value to $15,000 in two years?
A) $7,000.
B) $7,500.
C) $8,000.
D) $11,500.
E) $15,500.

Respuesta :

Answer:

Answer is C. $8,000.

Refer below

Explanation:

You disagree with Ed "Shifty" Smith, a car salesperson, on the price of an open-end lease. He says the depreciation charge is only $6,000. The actual depreciation charge for a car now worth $23,000 that is expected to drop in value to $15,000 in two years is $8,000.

Answer:

C. $8,000

Explanation:

A car now worth $23,000 is expected to drop in value to $15,000 in two years, to calculate the actual depreciation charge, the expected drop in value is deducted from the current value of the car. This is shown below

Current worth ($23,000) - Expected drop in value ($15,000)

                     = $8,000.

The actual depreciation charge for the car is $8,000.

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