The double-declining-balance and straight-line depreciation methods Produce the same total depreciation over an asset's useful life.
- Two of the four depreciation methods permitted by US generally accepted accounting standards are the straight-line and double-declining-balance depreciation procedures (GAAP).
- The sum of the years' digit and units of production are the other two techniques. By deducting the salvage value from the asset's purchase price and either dividing the depreciable amount by the number of years or applying a preset rate to the depreciable amount, the straight-line method is derived.
- The depreciation rate is calculated using the double-declining-balance technique by dividing 100 percent by the asset's useful life in years, then multiplying the result by two.
- The diminishing amount is then used to calculate depreciation expenditure until only the salvage value is left. They therefore result in the same depreciation over the course of the asset's useful life.
<h3>Is double declining balance a method of straight-line depreciation?</h3>
- The straight-line depreciation technique, another and arguably even more frequent type of depreciation, depreciates an asset's value at a rate that is half that of the DDB depreciation method.
<h3>What is double declining balance depreciation method?</h3>
- A type of accelerated depreciation method called the double-declining balance method doubles the rate at which an asset's value depreciates compared to the straight-line approach.
- Accelerated depreciation refers to the process of depreciation that occurs twice as quickly as the straight-line method.
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Answer:
15,540
Explanation:
Depletion = depletion rate x (gross income - expenses)
0.14 x ($340,000 - $229,000) = 15,540
Answer:
GDP to increase
Explanation:
Gross domestic product (GDP) refers to the total value of goods and services produced within the boundaries of a nation. Its component are consumption, investment, government expenditure and net exports.
GDP = Y = Consumption + Investment + Government expenditure + Net exports
Net exports refers to the difference of total value of exports and total value of imports.
Net exports = Exports - Imports
Therefore, if there is an increase in the net exports then as a result the GDP of a nation increases.
Answer:
$970
Explanation:
The computation of the free cash flow is shown below:
As we know that
Free cash flow is
= EBIT (1 - tax rate) + depreciation expense - capital expenditure - net working capital
where
EBIT is
Sales $9,250.00
Less: Operating costs excluding depreciation $5,750.00
Less: Depreciation $700.00
Operating income (EBIT) $2,800.00
Now the free cash flow is
= $2,800 × (1 - 0.35) + $700 - $1,250 - $300
= $1,820 + $700 - $1,250 - $300
= $970
Question : What is sustainable growth Rate
Answer:
Sustainable growth Rate = 1.69 %
Explanation:
Sustainable growth Rate = Return on Equity x Retention Rate
Where Return on Equity = Asset Utilization Rate x Profitability Rate x Financial Utilization Rate
Asset Utilization Rate= Total Sales/Total Assets
= 20,700/46,260 = 0.45
Profitability Rate = Net Income/ Total Assets
= 4,940/46,260 = 0.11
Financial Utilization Rate = total debt/ Total equity
= 16,780/ 29,480 = 0.57
Return on Equity = 0.45 x 0.11 x 0.57
=0.028
Retention Rate = 1- dividend pay out ratio
= 1-0.40
= 0.60
Sustainable growth Rate = 0.028 x 0.60
= 1.69 %
