Assume that we wish to determine the expected value and standard deviation of returns of Assets A. The expected returns of assets A and probabilty for each of the next 5 years are given in columns 1 and 2 respectively in the table. Find the expected value and standard deviation of returns for Asset A . Year Asset A Prob. 2019 18,00 0,25 2020 16,00 0,20 2021 13,00 0,15 2022 9,00 0,20 2023 11,00 0,20
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Assume that we wish to determine the expected value and standard deviation of
|
Year |
Asset A |
Prob. |
|
2019 |
18,00 |
0,25 |
|
2020 |
16,00 |
0,20 |
|
2021 |
13,00 |
0,15 |
|
2022 |
9,00 |
0,20 |
|
2023 |
11,00 |
0,20 |
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