The ____ Depreciation Method Calculates Interest as Highest in the First

question 130

Multiple Choice

The ____ depreciation method calculates interest as highest in the first period and decreases in amount each period thereafter.

• A) double-declining balance
• B) fixed-declining balance
• C) sum of the years digits
• D) variable-declining balance

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Definitions:

Revenue Forecast

An estimate of the amount of money a company expects to earn over a specific period in the future.

Sustainable Growth Rate

The maximum rate at which a company can grow without needing to increase financial leverage.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets, measuring how efficiently assets are utilized.