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Questions and Answers
What is the formula for calculating the book value of an asset using simple depreciation?
What is the formula for calculating the book value of an asset using simple depreciation?
- $A = P(1 - i)$
- $A = P(1 - in)$ (correct)
- $A = P(1 + in)$
- $A = P(1 + i)^n$
What is a key characteristic of compound depreciation?
What is a key characteristic of compound depreciation?
- The book value increases exponentially over time.
- The depreciation amount remains the same every year.
- The depreciation amount changes each year, decreasing as the asset's value decreases. (correct)
- The asset's value becomes zero at the end of its useful life.
How do you find the annual depreciation rate (i) for simple decay?
How do you find the annual depreciation rate (i) for simple decay?
- Rearrange the formula to solve for i. (correct)
- Use the formula A = P(1 + in) to find i.
- Rearrange the formula to solve for A.
- Rearrange the formula to solve for P.
What is the relationship between the initial value, final value, and depreciation rate in simple decay?
What is the relationship between the initial value, final value, and depreciation rate in simple decay?
What is the formula for calculating the total depreciation for simple depreciation?
What is the formula for calculating the total depreciation for simple depreciation?
What happens to the book value of an asset over time using compound depreciation?
What happens to the book value of an asset over time using compound depreciation?
What is a key difference between simple and compound depreciation?
What is a key difference between simple and compound depreciation?
Why can't the book value of an asset ever reach zero using compound depreciation?
Why can't the book value of an asset ever reach zero using compound depreciation?
What is the primary difference between simple and compound depreciation?
What is the primary difference between simple and compound depreciation?
If an asset has a principal amount of $10,000 and a depreciation rate of 10%, what is its book value after 2 years using simple depreciation?
If an asset has a principal amount of $10,000 and a depreciation rate of 10%, what is its book value after 2 years using simple depreciation?
What is the total depreciation of an asset with a principal amount of $8,000, a depreciation rate of 15%, and a time period of 5 years using simple depreciation?
What is the total depreciation of an asset with a principal amount of $8,000, a depreciation rate of 15%, and a time period of 5 years using simple depreciation?
Which of the following statements is true about compound depreciation?
Which of the following statements is true about compound depreciation?
If an asset has a principal amount of $12,000 and a depreciation rate of 12%, what is its book value after 3 years using compound depreciation?
If an asset has a principal amount of $12,000 and a depreciation rate of 12%, what is its book value after 3 years using compound depreciation?
What is the purpose of finding the annual depreciation rate (i) in depreciation calculations?
What is the purpose of finding the annual depreciation rate (i) in depreciation calculations?
Which of the following is a characteristic of simple depreciation?
Which of the following is a characteristic of simple depreciation?
What is the result of rearranging the simple depreciation formula to solve for i?
What is the result of rearranging the simple depreciation formula to solve for i?
If an asset has a principal amount of $15,000 and a depreciation rate of 8%, what is its book value after 4 years using simple depreciation?
If an asset has a principal amount of $15,000 and a depreciation rate of 8%, what is its book value after 4 years using simple depreciation?
What is the total depreciation of an asset with a principal amount of $18,000, a depreciation rate of 12%, and a time period of 6 years using compound depreciation?
What is the total depreciation of an asset with a principal amount of $18,000, a depreciation rate of 12%, and a time period of 6 years using compound depreciation?
An asset has a principal amount of $20,000 and a depreciation rate of 10%. If the book value after 5 years is $12,832, what type of depreciation is being used?
An asset has a principal amount of $20,000 and a depreciation rate of 10%. If the book value after 5 years is $12,832, what type of depreciation is being used?
What is the relationship between the initial value, final value, and depreciation rate in compound decay?
What is the relationship between the initial value, final value, and depreciation rate in compound decay?
An asset has a principal amount of $25,000 and a depreciation rate of 15%. If the book value after 3 years is $17,421.88, what is the total depreciation?
An asset has a principal amount of $25,000 and a depreciation rate of 15%. If the book value after 3 years is $17,421.88, what is the total depreciation?
What is the depreciation rate of an asset with a principal amount of $30,000, a book value of $21,952.38 after 4 years, and a depreciation method of compound decay?
What is the depreciation rate of an asset with a principal amount of $30,000, a book value of $21,952.38 after 4 years, and a depreciation method of compound decay?
An asset has a principal amount of $22,000 and a depreciation rate of 18%. If the book value after 2 years is $15,808.64, what is the depreciation amount for the second year?
An asset has a principal amount of $22,000 and a depreciation rate of 18%. If the book value after 2 years is $15,808.64, what is the depreciation amount for the second year?
What is the book value of an asset with a principal amount of $28,000, a depreciation rate of 12%, and a time period of 5 years using simple depreciation?
What is the book value of an asset with a principal amount of $28,000, a depreciation rate of 12%, and a time period of 5 years using simple depreciation?
