1 . Making depreciation expense as a percent of net PPE is a common way of modeling...
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Question:
Making depreciation expense as a percent of net PPE is a common way of modeling straightline depreciation. Does it really model straightline depreciation? Hint: Consider the case in which the capex growth rate is
aYes
bNo
In fact, does the depreciation expense ever become $ if depreciation expense is made a percent of net PPE?
aYes
bNo
If depreciation expense is made a percent of net PPE, then the depreciation expense for a single asset
aincreases over time
bdecreases over time
If depreciation expense is made N of net PPE, then the depreciation is
aslower than straightline depreciation with a useful life of N years.
bfaster than straightline depreciation with a useful life of N years.
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