Question: A profitable company making earthmoving equipment is considering an investment of $100,000 on equipment that will have 5-year useful life and a $20,000 salvage value

A profitable company making earthmoving equipment is considering an investment of $100,000 on equipment that will have 5-year useful life and a $20,000 salvage value. If money is worth 10%, which one of the following three methods of depreciation would be preferable?

(a) Straight-line method.

(b) Double declining balance method.

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