The _____ Calculates Depreciation Based on Usage Instead of the Years

question 15

Multiple Choice

The _____ calculates depreciation based on usage instead of the years of service anticipated.

• A) double-declining-balance method
• B) Modified Accelerated Cost Recovery System (MACRS)
• C) units-of-production method
• D) straight-line method

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Definitions:

LIBOR

The London Interbank Offered Rate, an interest rate average calculated from estimates submitted by the leading banks in London and used as a reference for lending rates worldwide.

Notional Principal

The term refers to the principal amount, or face value, upon which interest payments or financial derivatives are calculated, without the need for physical exchange of the principal sum.

T-bond Contract

A futures contract based on Treasury bonds, which are long-term government debt securities with a maturity of more than 10 years.

Positive Cost

Expenses that result in a benefit or return in the future, considered an investment rather than a loss.