Dear beloved readers, welcome to our website! We hope your visit here brings you valuable insights and meaningful inspiration. Thank you for taking the time to stop by and explore the content we've prepared for you.
------------------------------------------------ What is the rate of depreciation (in dollars per year) after 1 year for the company limousine?

A) $-124,960.39
B) $-124,960
C) $-124,961
D) $-124,959

The rate of depreciation for the company limousine after 1 year is $50,000 per year using the sum-of-digits method. The correct multiple-choice option is none of these.

Explanation:

The rate of depreciation (in dollars per year) after 1 year for the company limousine can be calculated using the sum-of-digits method.

To calculate this, first, determine the total depreciation for the year. Then, divide this total depreciation by the remaining useful life of the asset to obtain the yearly depreciation amount.

For the company limousine with a depreciation of $50,000 per year, the rate of depreciation after 1 year would be $50,000 per year. The correct multiple-choice option is none of these.

Question

A limousine company charges a fixed cost for a limousine and an hourly rate for it's driver. It cost $500 to rent a limousine for 5 hours and $800 to rent a limousine for 10 hours. What is the fixed cost, in dollars, to rent the limousine.