Under annuity method, the amount of depreciation _____________.

Increases every year

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Decreases every year

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Remains fixed over the life of the asset

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None of these

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Solution

The correct option is A Remains fixed over the life of the asset
Option C is the correct one.

The asset is then credited with a fixed amount of depreciation for each successive year. The annuity method assumes that the sum spent on buying an asset is an investment that should be expected to yield interest.

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