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LIL JU Fresh Food Express specializes in the delivery of refrigerated foods. The manager of the Delivery Division purchased a delivery truck for $240,000 and

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LIL JU Fresh Food Express specializes in the delivery of refrigerated foods. The manager of the Delivery Division purchased a delivery truck for $240,000 and has expressed concern over the effect of depreciating that and other trucks on his Division's profits. As an assistant to the Chief Financial Officer (CFO), you have been asked to prepare a presentation meant to demonstrate the differential effects of three depreciation methods: activity-based, straight-line, and double-declining balance. The truck's estimated residual value is $40,000. You have plotted depreciation each year (eft graph) using an estimated five-year useful life. The graph on the right shows the accumulation of depreciation each for each method. Depreciation Each Year by Method Accumulated Depreciation Each Year by Method $120,000 $250,000 $100,000 $200,000 $200.000 580,000 $150.000 Method $60,000 $100,000 Method Method $40,000 $20,000 -Method: --Method 2 Method 3 $50,000 So 50 Year 1 2 3 4 Yout 2 Click here to open the grabisin new.tab

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