The Double-Declining-Balance Depreciation Method Calculates Depreciation Each Year by Taking

question 144

True/False

The double-declining-balance depreciation method calculates depreciation each year by taking twice the straight-line rate times the book value of the asset at the beginning of each year.

---

Definitions:

Tax Basis

The value of an asset for tax purposes, used to calculate depreciation, amortization, and gains or losses on the sale of the asset.

Market Value

The present rate at which a product or service can be purchased or sold in the market.

Residual Dividend Policy

A strategy where a company pays dividends out of the residual or leftover equity once all project capital requirements are met.

Payout Ratios

The percentage of a company's earnings distributed to its shareholders in the form of dividends, relative to its total earnings.