Acompany wishes to report the highest earnings possible for financial reporting purposes.

therefore, when calculating depreciation:
a. it will follow the macrs depreciation tables prescribed by the irs.
b. it will select the shortest lives possible for its assets.
c. it will select the lowest residual values for its assets.
d. it will estimate higher residual values for its assets.

d. It will estimate higher residual values for its assets.

Explanation:

The depreciation is calculated on the value of the asset to be depreciated in the life of the asset that is cost - Salvage or residual value.

Thus, when the residual value is high then the amount to be depreciated will be low.

Then no matter whatever the method of depreciation be: the value of depreciation expense in dollars will be ultimately.

This will help in showing the highest earnings whatever the circumstance be.

Thus correct option is D.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: