What happens to the depreciation rate if an asset is used for less than 12 months in its first year?

The correct choice reflects that the depreciation rate remains constant, regardless of the duration an asset is used in its first year. Depreciation is typically based on the asset's useful life and the method chosen for calculating it, such as straight-line or declining balance methods. The predetermined percentage is applied to the asset's cost, and this rate is unaffected by whether the asset is in use for a full year or part of a year.

Assets are often depreciated over a defined span of years, so even if the asset is only utilized for a fraction of the time in the first year, the depreciation rate predetermined for that asset remains unchanged. When the asset is subjected to use for less than twelve months, the total depreciation expense for that year will indeed be lower since it will only cover the months it was actively used. However, that does not modify the fundamental depreciation rate applicable to the asset.

Calculating the actual expense takes into account the proportionate use of the asset but does not call for an adjustment of the depreciation rate itself.