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An accelerated method such as double declining balance charges more depreciation

  • A.in the middle years of the life
  • B.in whichever year the tax rate is highest
  • C.in the early years of the life
  • D.in the later years of the life

Answer: C

Correct answer: in the early years of the life

Accelerated methods front-load the charge, taking more in the early years and less later, while the total over the life is unchanged. The attraction is the timing of the tax saving: the same total deduction taken sooner is worth more in present value, which is why tax codes permit and firms choose accelerated methods.

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