Multiple choice

Directions: Choose the correct option for the given question.

Which of the following methods for providing depreciation considers interest?

  1. Double decline method

  2. Sum of the year method

  3. Annuity method

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The annuity method of depreciation treats the asset as an investment and calculates depreciation by considering the interest on the capital invested in the asset.

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