Business FinancesQuestion 1198 of 1605
A contractor's equipment cost $18,000 and after 3 years of straight-line depreciation (6-year life, no salvage) its book value is:
a.$12,000
b.$3,000
c.$9,000
d.$6,000
Explanation
Annual depreciation = $18,000 / 6 = $3,000. After 3 years, accumulated depreciation = 3 x $3,000 = $9,000. Book value = $18,000 - $9,000 = $9,000.
Practice all 1605 questions free — no signup required.
Related questions on this topic
- A contractor's gross profit is $120,000 and overhead is $95,000. What is his net profit?
- A change order adds $3,200 of direct cost to a job. If the contractor applies his standard 30% markup, how much should the change order add to the contract price?
- A written, signed change order is important because it:
- A markup that covers BOTH overhead and profit is sometimes called:
- A contractor bills $75,000 on a job. The contract requires 10% retention and the owner also back-charges $1,500 for a utility relocation. How much will the contractor receive on this billing?
- Which is the best reason to separate business and personal bank accounts?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)