We’ve updated our privacy policy so that we are compliant with changing global privacy regulations and to provide you with insight into the limited ways in which we use your data.
You can read the details below. By accepting, you agree to the updated privacy policy.
Thank you!
View updated privacy policy
We've encountered a problem, please try again.
Engineering Economy
Depreciation
Depreciation
This module deals with depreciation and the different methods of
solving depreciation charges.
At the end of this module, the learner should be able to:
1.Calculate the depreciation charge for any particular year using the
different methods.
2.Compute for the book value for any particular year using any
depreciation method.
Definition of Terms
1.Depreciation – is the decrease in the value of physical property with the
passage of time.
2. Value – present worth of all future profits that are to be received
through ownership of a particular property.
3.Market Value- the amount which a willing buyer will pay to willing
seller for the property each has equal advantage and is under no
compulsion to buy or sell.
4.Utility/Use Value – is what the property is worth to the owner as an
operating unit.
5.Fair Value- is the value which is usually determined by a disinterested
third party in order to establish a price that is fair to both seller and
buyer.
6. Book Value – sometimes called depreciated book value, it is worth of a
property as shown on the accounting records of an enterprise.
7.Salvage or Resale Value- is the price that can be obtained from the sale
of the property after it has been used.
8.Scrap Value- is the amount of property would sell for if disposed off as
junk.
9.Straight Line Method – this method assumes that the loss in value is
directly proportional to the age of property.
10. Sinking Fund Method – this method assumes that a sinking fund is
established in which funds will accumulate for replacement.
11. Declining Balance method (Matheson Formula) – also called the
constant percentage method – it is assumed that the annual cost of
depreciation is a fixed percentage of the salvage value of the beginning
of the year.
Which is NOT an essential element of an ordinary annuity ?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of time.
C. The first payment is made at the beginning of the first period.
D. Compound interest is paid on all amounts in the annuity.
Engineering Economy Mcqs
- Home >> Category >> Civil Engineering Mcqs >> Engineering Economy Mcqs >> In what method of computing depreciation where it assumes that the loss in value is directly proport...
- « Previous
- Next »
Q. In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset ?
a. Straight line method
b. Sinking fund method
c. Sum-of-year digit method
d. Declining balance method
MCQs: The process of determining the value or worth of a
physical property for specific reason is called ____________________? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: The unrecovered depreciation which results due to
poor estimates as to the life of the equipment is called _____________________? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What refers to the present worth of cost associated with an asset for an infinite
period of time ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: Capitalized cost of a project is also known as ____________________? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What is normally used to compare alternatives that accomplish the same
purpose but have unequal lives ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What method is often used in municipal project
evaluations where benefits and costs accrue to different segments of the community ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What refers to an imaginary cost representing what will not be
received if a particular strategy is rejected ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What is the main reason why the sinking fund method of computing
depreciation is seldom used in the industry ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What is the factor name of the formula (1+i)^-n ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1] ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: A
form of business organization in which a person conducts his business alone and entirely for his own profit, being solely responsible for all its activities and liabilities ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: Is
an artificial being created by operation of law, having the right of succession and the process, attributes and properties expressly authorized by the law or incident to its existence ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What is the simplest form of business organization ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: Double taxation is a disadvantage of which business organization ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: In case of bankruptcy of a partnership________________? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: Which is true about partnership ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: Which is true about corporation ? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: An association of two or more persons for the purpose
of engaging into a business for profit is called ____________________? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: Aggregation of
individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called ________________________? Category: Civil Engineering Mcqs, Published by: teswesm |
MCQs: What represents the ownership
of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled ? Category: Civil Engineering Mcqs, Published by: teswesm |
- « Previous
- Next »