Which of the following depreciation system ensures that the interest be charged on the cost of machine asset every year on the book value, but the rate of depreciation every year remains constant
A. Sinking fund method
B. Straight line method
C. ABC charging method
D. Annuity charging method
Answer: Option D
Solution(By Examveda Team)
The annuity charging 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.
Related Questions on Industrial Engineering and Production Management
The essential condition for the decompression of an activity is that
A. The project time should change due to decompression
B. After decompression the time of an activity invariably exceeds its normal time
C. An activity could be decompressed to the maximum extent of its normal time
D. None of the above
A. CAM < DAM
B. CAM > DAM
C. CAM = DAM
D. There is no such criterion
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