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13. When using PP&E as the forecast driver for depreciation, which of the following is most accurate? a) From both an ideal a
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Answer #1

Option B

The depreciation is calculated as from net PPE.

The PP&E forecast formula is

PP&E (End of Period ) = PP&E (Beginning of period) + Capital Expenditure - Depreciation _ Asset Sales

The PP& E used in this formula are the net values.

The depreciation is also calculated as a percentage of capital expenditures which add to the net value of the PP&E.

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