What is the annual depreciation rate? For this accounting question On January 1, 20X1, PrimeCo, which uses the straight-line method, purchases a machine for $59,000 that itexpects to last for 10 years; PrimeCo expects themachine to have a residual value of $8,000.What is the annual depreciation rate?a. 8.6%b. 20%c. 10%d. 13.6%e. 86.4%

Step 1: Define Residual ValueThe residual value of assets, also known as scrap value, is the…

Answered: On January 1, 20X1, PrimeCo, which uses…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 2P

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On January 1, 20X1, PrimeCo, which uses the straight- line method, purchases a machine for $59,000 that it expects to last for 10 years; PrimeCo expects the machine to have a residual value of $8,000. What is the annual depreciation rate? a. 8.6% b. 20% c. 10% d. 13.6% e. 86.4%