Question
You are the manager of a small manufacturing firm and your company just purchased a machine that will help fabricate steel more efficiently.The machine costs
You are the manager of a small manufacturing firm and your company just purchased a machine that will help fabricate steel more efficiently.The machine costs $10,000 and is expected to last 10 years.You expect the next few years to be very tough for your business and your line of credit with the bank is coming due later this year.One of your assistants wants you to use the double-declining balance method because he just heard about in college and thinks it will help make the business more profitable in the future.Do you agree with your assistant's assertion?What does his planning do for the business in light of the bank's loan renegotiation next year?
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