Correct Answer - Option 3 : Geometric projection method
Different methods to calculate depreciation are as follows :
a) Straight-line method
b) Constant percentage method
c) Sinking fund method
d) Quantity survey method
e) Declining balance method
Quantity survey method: In this method, the property is studied in detail and the extent of physical deterioration is worked out in an endeavor to calculate the depreciation.
Sinking fund method: In this method, the depreciation is assumed to be the annual sinking fund plus interest of the accumulated sinking fund till that year.
Constant percentage method: In this method, the property is assumed to lose value annually at a constant percentage of its value.
Straight-line method: In this method, the property is assumed to lose value by a constant amount every year.
Declining balance method: Declining Balance Method of Depreciation also called as reducing balance method where assets are depreciated at a higher rate in the initial years than in the subsequent years.
