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In this method, it is assumed that the property will lose its value by a constant percentage of its value at the beginning of every year. This method is called?

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In this method, it is assumed that the property will lose its value by a constant percentage of its value at the beginning of every year. This method is called?

(a) Sinking fund method

(b) Constant percentage method

(c) Straight line method

(d) Quantity survey method

The question was posed to me during an online exam.

My doubt is from Values, Tax, Funds & Rents etc topic in portion Valuation, Reports Technical and Design Data of Civil Engineering Drawing

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The correct choice is (c) Straight line method

The best I can explain: In this method a fixed amount of the original cost is deducted every year so that at the end of the utility period only the scrap value is left.

Annual depreciation D = Original cost-scrap value/life in year = C-S/n,

Where C- original cost, S- scrap value, n-life of the property in years and D- annual depreciation. The book value after the number of years, say N years = original cost – N*D.

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