Depreciation: straight-line and reducing balance
Set the cost, life and rate to see the book value each year under both methods.
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Questions students ask
Which method should a business use?
Straight-line suits assets that wear evenly, like buildings; reducing balance suits vehicles and computers that lose most value early.
What formula does it use?
Straight-line: cost ÷ life each year. Reducing balance: value × (1 − r)ᵗ.
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