The Depreciation Base Is Computed as Follows

question 108

True/False

The depreciation base is computed as follows:
Estimated Residual Value = Depreciation Base - Asset Cost

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Definitions:

Face Value

The nominal value stated on a financial instrument, such as a bond or stock certificate, representing its official worth.

Par Value

The nominal value or face value given to a security or bond by the issuer.

Default Risk Premium

The additional amount a borrower must pay to compensate the lender for assuming the risk that the borrower may default on the loan.

Clean Price

The price of a bond excluding any accrued interest; the price the bond is actually quoted at in the financial markets.