Red Corporation constructed a machine at a total cost of $52 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being depreciated over a 7-year life using the straight-line method. The residual value is expected to be $3 million. At the beginning of 2024, Red decided to change to the sum-of-the-years'-digits method. Ignoring income taxes, what will be Red's depreciation expense for 2024? Note: Do not round intermediate calculations. Round final answer to 2 decimal places. Multiple Choice O $2.50 million. $1.75 million $7.00 million $11.20 million
Red Corporation constructed a machine at a total cost of $52 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being depreciated over a 7-year life using the straight-line method. The residual value is expected to be $3 million. At the beginning of 2024, Red decided to change to the sum-of-the-years'-digits method. Ignoring income taxes, what will be Red's depreciation expense for 2024? Note: Do not round intermediate calculations. Round final answer to 2 decimal places. Multiple Choice O $2.50 million. $1.75 million $7.00 million $11.20 million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Red Corporation constructed a machine at a total cost of $52 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being
depreciated over a 7-year life using the straight-line method. The residual value is expected to be $3 million. At the beginning of 2024, Red decided to change to the sum-of-the-years'-digits method. Ignoring income
taxes, what will be Red's depreciation expense for 2024?
Note: Do not round intermediate calculations. Round final answer to 2 decimal places.
Multiple Choice
$2.50 million
$1.75 million
$7.00 million
$11.20 million
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