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Could u please tell me when annuity depreciation should be used in calculation of ROI n RI.
In the Dec 2007 Ques Alpha Division …….. I did my calculations using annuity dep as i thought it would show a better picture about the performance. However, the in the exam kit the depreciation wuz simply done on a straight line basis.thank you.
Only do annuity depreciation if specifically instructed to. Personally, I think it’s a big fiddle as I can’t really think that annual depreciation is likely to keep rising as an asset wears out.
‘Annuity depreciation’ is not mentioned specifically in the syllabus or study guide, so I think you are unlikely to be required to calculate it.
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