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Question(s) / Instruction(s):

 A factory machine was purchased for $40,000 on January 1, 2002.  It was estimated that it would have an $8,000 salvage value at the end of its 5-year useful life.  It was also estimated that the machine would be run 40,000 hours in the 5 years.  If the actual number of machine hours ran in 2002 was 4,000 hours and the company uses the units of activity method of depreciation, the amount of depreciation expense for 2002 would be

a)            $4,000.

b)            $6,400.

c)            $8,000.

d)            $3,200.

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