Discounting Liabilities Using the Present Value Technique Is Not Ecologically

question 30

Multiple Choice

Discounting liabilities using the present value technique is not ecologically sound because:

• A) Environmental liabilities are hard to measure.
• B) The value of a dollar in the present is greater than the value of a dollar in the future.
• C) Discounting has the effect of reducing the apparent size of the cost of future environmental clean-up and so encourages entities to undertake projects that have large negative (distant) future impacts on the environment.
• D) It discourages entities from providing sufficient reserves to restore environments after project completion.
• E) All of the given answers.

Calculate annual depreciation expenses for various types of assets.

Calculate book value at the end of a given period using different depreciation methods.

Apply the concept of estimated scrap value in depreciation calculations.

Differentiate between methods of depreciation for various types of assets.