Which of the Following Amortization Methods Produces the Highest Amortization

question 64

Multiple Choice

Which of the following amortization methods produces the highest amortization expense in the first year of life of an asset that cost $10,000, has an estimated useful life of four years, and an estimated residual value of $1,500?

• A) Straight-line
• B) Productive output (with increasing output levels)
• C) Sum-of-the-years'-digits
• D) Declining balance

---

Definitions:

Ideologically Bound

Being closely attached or committed to a particular set of beliefs or ideology.

State Debts

The financial obligations incurred by the governments of individual states, often as a result of borrowing to fund public projects and services.

Speculators

Individuals or entities that invest in markets primarily to profit from fluctuations in asset prices, rather than from the intrinsic value or income of the assets.

Face Value

The nominal value or stated value of a financial instrument or currency, as printed or inscribed on it.