A Principal Objection to the Straight-Line Method of Depreciation Is

question 100

Multiple Choice

A principal objection to the straight-line method of depreciation is that it

• A) provides for the declining productivity of an aging asset.
• B) ignores variations in the rate of asset use.
• C) tends to result in a constant rate of return on a diminishing investment base.
• D) gives smaller periodic write-offs than decreasing charge methods.

---

Definitions:

Real Exchange Rate

The real exchange rate compares the relative price of goods and services between countries, adjusted for differences in price levels.

Nominal Exchange Rate

The rate at which one country's currency can be exchanged for another country's currency.

Real Exchange Rate

An exchange rate that has been adjusted for the relative purchasing power of the two currencies, reflecting the quantity of goods and services one currency can buy in another country.

Domestic Prices

The prices of goods and services within a country's borders, influenced by local factors like production costs, taxes, and supply and demand.