Which of the following can cause depreciation of a machine?
Answer and explanation
Correct answer: Use and normal wear and tear
Depreciation is the gradual loss of value or productive capacity of a fixed asset. Regular use, physical wear and tear, and the passage of time can reduce a machine’s efficiency and value. Changes in product demand, subsidies, or share prices do not directly represent normal depreciation of that machine.
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What is the correct answer to this question?
Use and normal wear and tear
Why is this the correct answer?
Depreciation is the gradual loss of value or productive capacity of a fixed asset. Regular use, physical wear and tear, and the passage of time can reduce a machine’s efficiency and value. Changes in product demand, subsidies, or share prices do not directly represent normal depreciation of that machine.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Gross investment and depreciation.
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