Multiple Choice
Hershon Inc. acquires a new machine. It is comprised of 2 different identifiable components the P922 and the B14. Each of these components is expected to be overhauled at different intervals. The acquisition cost of the entire machine is as follows:
Component P922 is expected to have a useful life of five years and a residual value of before the first major overhaul is required. Component R14 is expected to have a useful life of seven years and a residual value of before its first overhaul.
-Assuming straight-line depreciation, what will be the net book value of component P922 at the end of year five?
A) $18,000
B) $20,000
C) $15,000
D) $22,000
Correct Answer:

Verified
Correct Answer:
Verified
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