Which of the Following Statements Is Correct

question 23

Multiple Choice

Which of the following statements is correct?

• A)Companies can change the method of depreciating assets from one year to the next.
• B)Companies can affect the book value at the end of an asset's life by choosing one method of depreciation over another.
• C)Companies can use one method of depreciation for some of their long-lived, productive assets but then use a different method for another group or type of long-lived, productive assets.
• D)Companies can minimize an asset's book value in the first year of use by selecting the straight-line depreciation method rather than the double-declining-balance method.

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Definitions:

YTM

Yield to Maturity (YTM) is the total return anticipated on a bond if the bond is held until its maturity date, accounting for its current market price, interest payments, and time value.

AAA Credit Rating

The highest credit rating assigned to a borrower's debt instruments by credit rating agencies, indicating an extremely low risk of default.

A Credit Rating

This is an evaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt and an implicit forecast of the likelihood of the debtor defaulting.

Note

Unsecured debt, usually with a maturity under 10 years.