Question

Under annuity method, the amount of depreciation is ___________.

• A. Increasing every year
• B. Decreasing every year
• C. Fixed for all the years
• D. Revalued every year

Answer 1

The correct option is C Fixed for all the years

The Annuity method of depreciation is a process used to calculate depreciation on an asset by calculating its rate of return as if it was an investment. in this method, a fixed rate of depreciation is calculated on the original cost of the asset. Depreciation is calculated as :
Original cost of an asset * annuity value.