Which Depreciation Method Is Most Frequently Used in Businesses Today

question 195

Multiple Choice

Which depreciation method is most frequently used in businesses today?

• A) Straight-line
• B) Declining-balance
• C) Units-of-activity
• D) Double-declining-balance

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Definitions:

Capital Structure

The mix of various forms of capital used by a company, including debt and equity, to finance its operations.

Equity

Represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off.

Refunding Investment Outlay

The process of reallocating or investing capital in new assets or projects with the intention of generating returns or benefits that exceed the initial costs.

Marginal Tax Rate

The marginal tax rate is the rate of tax that applies to the next dollar of taxable income above a pre-determined level.