New Methods of Producing Existing Products and New Designs That

question 20

Multiple Choice

New methods of producing existing products and new designs that make it possible to create new products are forms of

• A) depreciation.
• B) natural endowments.
• C) compensation.
• D) technological change.
• E) price stability.

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Definitions:

Allowable Depreciation

The deduction a company can take over the useful life of an asset, as determined by tax laws, to account for wear and tear.

Straight-Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Resale Value

The expected amount that an item or asset can be sold for at a future date, taking into account depreciation and market demand.

Sum-Of-The-Years-Digits

An accelerated method of depreciation which calculates annual depreciation by multiplying an asset's cost by a fraction that decreases year by year.