Machine-translated by Google. Questions are authored in English.
Top

Discussion

In double declining balance the rate applied is

  • A.twice the straight line rate
  • B.half the straight line rate
  • C.the straight line rate itself
  • D.the reciprocal of the salvage fraction

Answer: A

Correct answer: twice the straight line rate

The straight line rate is one over the life, so for a five-year asset it is 20 per cent and the double declining rate is 40. Other multiples are used - 150 per cent declining balance is common - and the multiplier is what fixes how aggressively the charge is front-loaded.

No comment is present. Be the first to comment.
Loading…

Post your comment

Please log in or register to post a comment.