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Cantanna Inc., is developing a pro forma income statement for the coming year. The chief 46....

Cantanna Inc., is developing a pro forma income statement for the coming year. The chief 46. financial officer estimates that fixed assets are $70,000,000 and that sales will be $300,000,000. If depreciation is historically 20% of fixed assets, what is the expected amount of depreciation for the upcoming year (in dollars)?

a. $14,000,000

b. $20,000,000

c. $60,000,000

d. this figure cannot be reasonably estimated

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Answer #1

Expected depreciation for upcoming year=$70,000,000*20%

which is equal to

=$14,000,000.

Hence the correct option is A.

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