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You are aralyzing the financial statements of two companies with a few of your classmates for a group assignment One of your group members makes
You are aralyzing the financial statements of two companies with a few of your classmates for a group assignment One of your group members makes the following statement: "Companies that use the diminkshins,balance depreciation method wll automatically have a lower net income each year when compared with companies using the straight-line depreciation method" Select the most appropriate response that your group member could hwe made rather than the one that they made in the question. Companies that use the diminishing balance method will have higher depreciation expense at the end of the asset's useful life compared to the straight-line method, resultig n higher net income at the beginning of the abset's useful life and lower net income at the end of its useful ilfe Companles that use the diminishing balance method will have lower net income at the beginning of the asset's life than at the end compared to the stratght-line method More of the asset's cost would be allocated initially, and fess would be allocated later in the asset's life. Companies that use the diminishing balance method would hove lower net income at the beginning of an asset's life than at the end when compared to the stralght-line method. More of the cost is allocated to the end of the asset's uselul life than the beginning: Companies that use the diminishing balance method will have lower depreciation opense at the beginning of the asset's useful life than at the end compared to the straight-line method. Net income would be higher initially and lower later on than under the straight-line method
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