Practice question 24 at the beginning of the year, powers company purchased a piece of machinery for $50,000. it has a salvage value of $5,000, an estimated useful life of 9 years, and estimated units of output of 90,000 units. actual units produced during the first year were 11,000. how much is depreciation expense for the first year under the straight-line method?

$5,000

Explanation:

The computation of the depreciation expense under the straight-line method  is shown below:

Depreciation expense = (Original cost - residual value) ÷ (useful life)

                                      = ($50,000 - $5,000) ÷ (9 years)

                                      = ($45,000) ÷ (9 years)  

                                      = $5,000

In this method, the depreciation is same for all the remaining useful life

The units are ignored in this method as it is used when units of production method applies

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.