A printing machine is purchased for $100,000 and is expected to last for 8 years with a salvage value of $20,000 Using straight-line depreciation, what are the coordinates of the y -intercept of the depreciation equation?
Answer
A
open paren 0 comma 100 dollars comma 000 close paren
B
open paren 0 comma 10 dollars comma 000 close paren
C
open paren 0 comma 12 dollars comma 500 close paren
D
open paren 0 comma 20 dollars comma 000 close paren
Explanation
The y-intercept represents the machine’s value when 0 years have passed, which is its purchase price. The machine initially costs $100,000, so the y-intercept is (0, $100,000). Choice C gives these coordinates; the salvage value is the value after 8 years, not the starting value.
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