A Company Purchased a Van at a Cost of $42,000

Multiple Choice

A company purchased a van at a cost of $42,000 and expects it can be sold for $6,000 after 120,000 miles of service. Assuming the units-of-production method is used and the van is driven for 24,000 miles during the first year, the depreciation at the end of the first year would be

A) $4,200.
B) $1,200.
C) $7,200.
D) $12,000.