Which of the Following Methods of Computing Depreciation Is Production

question 167

Multiple Choice

Which of the following methods of computing depreciation is production based?

• A) Straight-line
• B) Declining-balance
• C) Units-of-activity
• D) None of these answer choices are correct.

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Definitions:

Payback Period

The payback period is the time required for an investment to generate cash flows sufficient to recover its initial cost.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

Depreciated

The process of allocating the cost of a tangible or fixed asset over its useful life, reflecting its consumption, wear, and tear, or obsolescence.

Net Cash Flow

The difference between a company's cash inflows and outflows in a given period.