Fixed Assets Increase

DEF Limited, a company that specializes in high-end audio components, is planning to expand into a new market by investing in a new production line. DEF invested a total of $150,000 into the new production line, consisting of $100,000 received from a five-year loan and $50,000 of DEF’s own cash. DEF’s management has decided to use the straight-line depreciation method over a 10-year period, and the salvage (residual) value of the production line is zero.

What is the increase to DEF’s fixed assets when the production line is put into operation?

$ 
   

Tags
Accounting and Finance Fixed asset management Public New
Easy

2min

Score Distribution
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