The rate of depreciation is the:
A) nominal interest rate times the purchase price of capital.
B) capital losses resulting from decreases in the price of capital.
C) fraction of the value of capital lost per period because of wear and tear.
D) change in the q value of the firm.

Question

Quizplus · Accepted Answer

The rate of depreciation refers to the fraction of the value of capital lost per period due to wear and tear. Option A is incorrect as it refers to the calculation of interest paid on a loan to purchase the capital, not depreciation. Option B refers to capital losses resulting from a decrease in the price of capital, which is not directly related to depreciation. Option D refers to changes in the market value of the firm, which is not a measure of depreciation.

The Rate of Depreciation Is The