Ask Question
1 June, 03:57

The accounting rate of return requires the use of the accrual basis of accounting and therefore, the annual depreciation must be caluclated. How do you calculate the annual depreciation?

+4
Answers (1)
  1. 1 June, 05:01
    0
    Annual depreciation is calculated by dividing the cost of an asset over its useful life.

    Explanation:

    For example, if a company is looking to invest in new machinery which costs USD 300,000 and the machinery is expected to have a useful life of 10 years with no scap/salvage value, then the annual depreciation would be computed as:

    USD 300,000/10 = USD 30,000 depreciation expense per year.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The accounting rate of return requires the use of the accrual basis of accounting and therefore, the annual depreciation must be ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers