3 - Comparison of Depreciation Methods
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Practice Questions
Test your understanding with targeted questions
What does SYD stand for in depreciation?
💡 Hint: Think about the components considered in depreciation over time.
True or False: The Double Declining Balance method considers salvage value in its calculation.
💡 Hint: Remember how DDB is calculated.
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Interactive Quizzes
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What is the primary goal of using depreciation methods like DDB?
💡 Hint: Think about how depreciation affects taxes.
True or False: The total depreciation using SYD will differ compared to straight-line methods when calculated over the same lifespan.
💡 Hint: Recall the principle that all methods end up accounting for the same total cost.
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Challenge Problems
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Calculate the depreciation for a machine costing ₹ 1,500,000 over 5 years using the SYD method and provide a year-by-year breakdown.
💡 Hint: Start with total years and decrease dependency on n sequentially.
Given a machine with an initial cost of ₹ 1,000,000, salvage value of ₹ 200,000, and a useful life of 8 years, discuss making a switch from DDB to Straight Line in year 6 if DDB depreciation falls below the Straight Line method.
💡 Hint: Analyze year 6 depreciation from both perspectives to justify the switch.
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