1. The cost of equipment to apply epoxy paint to a warehouse floor is $1,400. Materials and supplies (masking tape, surface repair material, solvents, cleanup supplies, etc.) will cost $2.03 per ft2. Alternatively, a contractor can be hired annually to do the job for $3.25 per ft2. If the cost of the equipment will be recovered at i = 10% per year over a three-year period with no salvage value, the number of square feet that must be treated each year to justify the equipment purchase is closest to Multiple Choice

a) 2457 ft2 b) 460 ft2 c) 953 ft2 d) 1148 ft2

2. The double declining balance method of calculating depreciation expense forces companies to pay higher income taxes in the earlier years of the assets life.

A. True

B. False