The Depreciation Method That Does NOT Use Residual Value in Calculating

question 41

Multiple Choice

The depreciation method that does NOT use residual value in calculating depreciation expense until the last year is the:

• A)units-of-production method.
• B)straight-line method
• C)double-declining balance method.
• D)all of the above.

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Definitions:

After-Tax Salvage Value

The net value of an asset after it has been disposed of and all related taxes have been paid.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the financial health and operational efficiency.

Interest Expense

The cost incurred by an entity for borrowed funds, often expressed as an annual percentage of the principal.

Depreciable Asset

An asset that loses value over time due to wear and tear, and for which depreciation can be applied in accounting to spread its cost over its useful life.