Which Amortization Method Is Particularly Appropriate Where: (A) Obsolescence Is

question 23

Multiple Choice

Which amortization method is particularly appropriate where: (a) obsolescence is not the primary factor, (b) actual use can be accounted for, and (c) the service life in units of use can be estimated reliably?

• A) Sum-of-the-years'-digits
• B) Double-declining balance
• C) Productive output
• D) Straight-line

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Definitions:

Maximize

To increase to the greatest possible amount or degree or to achieve the highest possible outcome in a given situation.

Total Benefits

Total benefits refer to the complete range of economic, social, and personal advantages gained from an action or an investment.

Consumer Surplus

The difference between the highest price a consumer is willing to pay and the actual price they pay in the market.

Market Demand

The total amount of a product or service that consumers in a market are willing and able to purchase at a given price level in a given time period.