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The CEO of Herald Corporation has asked you to help him describe the effects of different depreciation methods. Herald recently purchased a new machine with
The CEO of Herald Corporation has asked you to help him describe the effects of different depreciation methods. Herald recently purchased a new machine with a capitalized cost of $500,000. The machine has an expected life of 5 years with no expected salvage value. Select the best response from those below regarding the depreciation for this asset. A) if we choose double declining balance depreciation rather than straight-line, depreciation expense in the first two years of this asset's life will be lower B) if we choose double declining balance depreciation rather than straight-line, net income for the first two years of this asset's life will be lower C) if we choose double declining balance depreciation rather than straight-line depreciation, total assets will be greater at the end of each of the first two years of this asset's life D) two of the above statements are correct E) all of the above statements are correct F) none of the above statements are correct
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