Answer:
total amount of additional depreciation = $2.5 million
so correct option is a. $2.5 million
Explanation:
given data
purchased 25% = $46 million
net assets = $62 million
depreciable assets = $10 million
net income = $62 million
dividends = $10 million
to find out
total amount of additional depreciation to be recognized by SBC over the remaining life of the assets
solution
we get here total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is
total amount of additional depreciation = $10 million × 25%
total amount of additional depreciation = $10 million × 0.25
total amount of additional depreciation = $2.5 million
so correct option is a. $2.5 million