You Have Been Hired by a High-Growth Startup Company to Assist

question 33

Essay

You have been hired by a high-growth startup company to assist in the determination of what depreciation method to employ for financial reporting.The company's fixed assets are equally divided among buildings and high-tech equipment (heavily used in the initial years).
(a)Can the company select different methods of depreciation for financial reporting? Explain.
(b)Explain to company management which method of depreciation would be suitable for each type of fixed assets the company employs.Also, state why.
(c)Which method of depreciation would the company choose for taxes? Explain why.

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Definitions:

Fixed-Ratio Reinforcement

A schedule of reinforcement where a response is rewarded only after a specified number of responses, promoting a high and stable response rate.

Variable-Ratio Reinforcement

A reinforcement schedule where a response is rewarded after an unpredictable number of responses, typically used to encourage repetitive behavior.

Fixed-Interval Reinforcement

A schedule of reinforcement where a response is rewarded only after a specified time has elapsed, leading to a pattern of responses following the passage of each interval.

Variable-Interval Reinforcement

A reinforcement schedule in which a response is rewarded after an unpredictable amount of time has passed.