Cara Company purchased a vehicle for $23,000, and estimated its useful life to be 8 years and its salvage value to be $4,000. After 6 years of straight-line depreciation, Cara decided to do a major overhaul at a cost of $9,500, which are expected to extend the life of the vehicle by 5 years beyond the original estimate. The new estimated salvage value is $2,000. The depreciation expense in year 7 equals:

A) $ 2,464
B) $ 2,321
C) $ 2,035
D) $ 1,893.
E) $ 1,750

Answer: B) $ 2,321

Business

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