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Discussion :: Industrial Engineering and Prod'n Mgmt

  1. 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

    2. A.

     Sinking fund method
    B.

     Straight line method
    C.

     ABC charging method
    D.

     Annuity charging method

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    Answer : Option D

    Explanation :

    the annuity 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.

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