Company a Has Equipment That Cost $5,250,000 Which Has Accumulated

Multiple Choice

Company A has equipment that cost $5,250,000 which has accumulated depreciation of $500,000 while Company B has equipment that costs $4,600,000 and has accumulated depreciation of $4,400,000. Assuming both companies use straight line depreciation and estimated useful lives of 40 years with $100,000 residual values, which of the following statements is true?

A) Both companies have relative old equipment.
B) Company A's equipment is older than Company B.
C) Company A's equipment is newer than Company B.
D) Company B's equipment has a higher book value than Company A.