Knodia Co. purchased a machine on January 1, 2007 for $10,000. The useful life of this machine is 3 years and the salvage value is $1,000. Knodia uses straight-line depreciation to recognize depreciation. On January 1, 2008, Knodia estimated that the machine would generate $3,000 in each year for the remaining useful life. The market interest rate is 10%.

Question 28 options:

Knodia should write down the machine to $5,206.61.

Knodia should write down the machine to $6,000.

Knodia should change the salvage value of the machine.

Knodia should not write down the machine.