Depreciation Methods

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Depreciation Methods
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Questions on Depreciation Methods

• Does book value reflect market value?
• Is there any cash outflow associated with
  depreciation expense?
• Which method is more conservative in the early
  years of an assets life? Why?
• Why do companies use straight line depreciation?
• Over the life of the asset, is there a difference
  in total depreciation expense?
• The asset is sold for 5000 at the end of the
  fifth year. Compute the gain or loss.