A contractor purchases equipment for $75,000 with a 5-year useful life and $5,000 salvage value. Using straight-line depreciation, what is the annual depreciation expense?
Correct Answer
D) $14,000
Straight-line depreciation = (Cost - Salvage value) ÷ Useful life = ($75,000 - $5,000) ÷ 5 = $14,000 per year
Why This Is the Correct Answer
Straight-line depreciation = (Cost - Salvage value) ÷ Useful life = ($75,000 - $5,000) ÷ 5 = $14,000 per year
More NASCLA Questions
Which AIA document contains the general conditions that govern the rights and responsibilities of all parties in a construction contract?
A construction company has direct labor costs of $85,000, direct materials of $120,000, and overhead costs of $45,000 for a project. What is the total job cost?
What is the primary purpose of job cost accounting in construction?
A construction company has current assets of $350,000 and current liabilities of $280,000. What is the company's working capital?
In CSI MasterFormat, which division covers earthwork and site preparation?
In a mechanical drawing, what does 'CFM' typically measure?
In CSI MasterFormat Division 08, which of the following would typically be included?
On a mechanical plan, what does the symbol 'RTU' typically indicate?
What is the minimum preheat temperature for welding ASTM A992 steel when the ambient temperature is 15°F?
A general contractor's balance sheet shows total assets of $850,000, current liabilities of $320,000, and long-term debt of $180,000. What is the company's equity?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
Which CSI MasterFormat Division would include specifications for drywall and metal framing?
Next Question
A contractor needs a crane for 6 months. Purchase price is $485,000 with 20% annual depreciation. Operating costs are $180/day for 120 working days. Rental cost is $2,800/month plus $95/day operating costs. Which option is more economical and by how much?