Question

Under which of the following method depreciation charges does not declines?

• A. Diminishing balance method
• B. Annuity method
• C. Double decline method
• D. All of the above

Answer 1

Answer: (B)

Annuity method

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. This method requires the determination of the internal rate of return (IRR) on the cash inflows and outflows of the asset