Which of the Following Depreciation Methods Allocates an Equal Amount

question 73

Multiple Choice

Which of the following depreciation methods allocates an equal amount of depreciation to each year?

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

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Definitions:

Arbitrage

The simultaneous purchase and sale of the same assets or commodities in different markets to profit from unequal prices.

Well-functioning Market

A market where resources are allocated efficiently, information is freely available, transaction costs are low, and property rights are protected.

Nominal Interest Rate

The percentage increase in money that borrowers pay lenders, not adjusted for inflation.

Inflation

The pace at which prices for various goods and services climb, diminishing the value of money to buy them.