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Description: A company purchases a computer system for$20000. The following graph shows thedepreciation of the computer system over the fiveyears period.How much is the rate of depreciation per year?VA2000060000 1 2a. $20000/yearb. $6000/yearC.14% per yeard. $28

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A company purchases a computer system for $20000. The following graph shows the depreciation of the computer system over the five years period. How much is the rate of depreciation per year?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

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Concept explainers

Completing the Accounting cycle

An accounting cycle is a multiple-step process that analyzes, verify, record and summarize the entities financial data. The accounting cycle starts when the transaction occurs between two parties and ends when the transaction is completed. The accounting cycle changes the entity's financial position as it involves identifying, verifying, and recording the financial transaction in chronological order. Financial position is the summary of business transactions that occurred throughout the particular accounting period. The accounting cycle recurs at the beginning of each financial year.

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Question

A company purchases a computer system for
$20000. The following graph shows the
depreciation of the computer system over the five
years period.
How much is the rate of depreciation per year?
VA
20000
6000
0 1 2
a. $20000/year
b. $6000/year
C.
14% per year
d. $2800/year
3
5

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