What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render? A. Functional depreciation B. Design depreciation C. Physical depreciation D. Demand depreciation

The correct answer is: D. Demand depreciation

Demand depreciation is a type of depreciation that is due to the reduction in the demand for the function that the equipment or asset was designed to render. This can happen for a number of reasons, such as the introduction of new technology, changes in consumer preferences, or changes in government regulations.

Functional depreciation is a type of depreciation that is due to the normal wear and tear on an asset. This type of depreciation is usually predictable and can be estimated based on the asset’s age and usage.

Design depreciation is a type of depreciation that is due to flaws in the design of an asset. This type of depreciation is usually not predictable and can be difficult to estimate.

Physical depreciation is a type of depreciation that is due to the physical deterioration of an asset. This type of depreciation is usually caused by factors such as weather, wear and tear, and accidents.

Here are some examples of demand depreciation:

• The demand for typewriters decreased significantly after the introduction of personal computers.
• The demand for film cameras decreased significantly after the introduction of digital cameras.
• The demand for landline telephones decreased significantly after the introduction of mobile phones.

I hope this helps! Let me know if you have any other questions.