If the Expiry of the Asset Is a Function of Its

question 89

Multiple Choice

If the expiry of the asset is a function of its usage, what is the most appropriate depreciation method for it?

• A)Straight-line
• B)Declining balance
• C)Units-of-production
• D)Market value

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Definitions:

Simple Interest Rate

A method of calculating interest where the charge is based only on the original principal, not on the accumulated interest.

Investment

The assignment of monetary values in the hope of making a profit or gaining income.

Interest

A fee paid for the use of borrowed funds, or for delaying the repayment of a debt.

Days

Units of time equivalent to 24 hours, often used to measure durations or intervals.