Which of the following is a commonly used method of depreciation?

The declining balance method is a widely recognized approach to depreciation because it allows businesses to allocate the cost of an asset over its useful life in a way that reflects its actual usage and value over time. This method applies a fixed percentage to the asset's remaining book value each year, leading to higher depreciation expenses in the earlier years of the asset's life. This makes it particularly useful for assets that lose value rapidly shortly after their purchase.

Using the declining balance method helps companies reflect a more accurate financial situation by recognizing the larger loss in value that often occurs in the early years of an asset's life. This contrasts with the straight-line method, which spreads the cost evenly over the asset's lifespan.

The other options provided relate to different concepts in finance and accounting. For example, net present value is a valuation method that calculates the present value of cash flows generated by an investment, while amortization typically refers to the gradual repayment of a loan or the gradual write-off of an intangible asset. The cash basis method refers to accounting principles that recognize revenue and expenses only when cash is actually received or paid, which is not concerned with depreciation.

Therefore, the declining balance method stands out as a practical and commonly utilized method for accounting for the depreciation of tangible fixed assets