QUESTION $4$

Company $x$ buys a factory for $30$ million USD. Management was going to depreciate the factory straight$-$line over $15$ years. However, just before the firm releases its financial statements, the firm decides to depreciate the factory over $10$ years instead. How big of a difference is this?

Depreciation increases by $1$ million USD per year.

Depreciation increases by $$500,000$ per year.

Depreciation remains the same.

Depreciation decreases by $$500,000$ per year.

Depreciation decreases by $1$ million USD per year.

QUESTION $5$

DPB$,$ Inc., on average, estimates that the return on the firm's retirement fund is $9\mathrm{.}5\%$ per year. Similar companies with similar pension portfolios forecast annual returns of $4\mathrm{.}2\%.$ Which of the following is DPB$,$ Inc. probably using to falsely inflate earnings?

$($GAAP$)$ Revenue recognition

$($Playing games with$)$ Depreciation

$($Improperly forecasting$)$ Expense estimates

$($Imbroderlv forecasting$)$ Pension fund returns