Question

You disagree with Ed "Shifty" Smith, a car salesperson, on the price of an open-end lease. He says the depreciation charge is only $6,000. What is the actual depreciation charge for a car now worth $23,000 that is expected to drop in value to $15,000 in two years?

A) $7,000.
B) $7,500.
C) $8,000.
D) $11,500.
E) $15,500.

Answer 1

C. $8,000

Step-by-step explanation:

A car now worth $23,000 is expected to drop in value to $15,000 in two years, to calculate the actual depreciation charge, the expected drop in value is deducted from the current value of the car. This is shown below

Current worth ($23,000) - Expected drop in value ($15,000)

= $8,000.

The actual depreciation charge for the car is $8,000.

Answer 2

Answer is C. $8,000.

Refer below

Step-by-step explanation:

You disagree with Ed "Shifty" Smith, a car salesperson, on the price of an open-end lease. He says the depreciation charge is only $6,000. The actual depreciation charge for a car now worth $23,000 that is expected to drop in value to $15,000 in two years is $8,000.