Unstable Ltd Has Decided to Change Its Depreciation Method from Straight-Line

question 24

Multiple Choice

Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance.As a result,its annual depreciation expense increases by $200 000.The company's income tax rate is 30 per cent.
-What is the effect on the debt-to-equity ratio?

• A) It increases.
• B) It decreases.
• C) There is no effect.
• D) It cannot be determined from the information provided.

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Definitions:

Fallopian Tubes

The pair of tubes that transport eggs from the ovaries to the uterus, also the site where fertilization of an egg by sperm typically occurs.

Uterine Tubes

Also known as fallopian tubes, these are the ducts through which eggs travel from the ovaries to the uterus.

Oviducts

Tubes that transport eggs from the ovaries to the uterus; also known as fallopian tubes.

Eustachian Tubes

Narrow tubes that connect the middle ear to the nasopharynx, helping to equalize ear pressure.