Use these facts for the following independent situations.

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.

What is depreciation expense for Year1 using the double declining balance method?

a. $25,000

b. $96,000

c. $100,000

d. $48,000

e. $50,000