Steele Inc. purchased a machine for $500,000 on January 1, Year1. The machine has a $20,000 residual value and an estimated life of 20 years. The machine is expected to produce 1,000,000 widgets over its life. Steele prepares annual financial statements at 12/31 each year.

Assume Steele uses the double-declining balance method.

Steele took $25,000 of depreciation in the year Year1 (assume for this problem that Year1 was not a full year for depreciation on this machine).

What is depreciation expense for Year2?

	a.	$45,500
	b.	$72,500
	c.	$47,500
	d.	$50,000
	e.	none of the above