The First Part of the Strict Approval Process for High-Dollar

question 62

Multiple Choice

The first part of the strict approval process for high-dollar fixed assets is the investment analysis.Which of the following is part of that analysis?

• A)Capital budget comparison
• B)Review of the proposal
• C)Financial justification
• D)Written requisition

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Definitions:

Double-Declining-Balance

A method of accelerated depreciation that doubles the normal depreciation rate, reducing the book value of assets more quickly in the early years.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, which reflects the loss in value due to usage, wear and tear, or obsolescence.

Residual Value

The forecasted price an asset is likely to command at the end of its usefulness.

Component Depreciation

A method of depreciation where different components of a fixed asset are depreciated separately over their respective useful lives.