Which of the Following Is the Correct Formula for Calculating

question 149

Multiple Choice

Which of the following is the correct formula for calculating depreciation under the straight-line method?

• A) Straight-line depreciation = (Cost + Residual value) / Useful life
• B) Straight-line depreciation = (Cost - Residual value) / Useful life
• C) Straight-line depreciation = (Cost + Residual value) × Useful life
• D) Straight-line depreciation = (Cost - Residual value) × Useful life

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Definitions:

Flotation Cost

The total costs associated with issuing new securities, including fees for underwriting, legal advice, and registration.

Initial Cash Outlay

The initial funds and costs required to initiate a project, investment, or venture.

Pre-Tax Cost

The expense or cost incurred by an entity before the deduction of taxes.

Net Present Value

A financial measure that computes the disparity between the present value of cash coming in and going out over a certain period.